Foreign real estate projects in Pakistan feel the heat of the UAE market downfall: The News

By Faryal Najeeb

KARACHI: The super-luxurious residential and commercial projects that had been initiated by foreign developers of United Arab Emirates (UAE) are rumored to be under a cloud as the construction work on some such projects had to be rescheduled following the impact on the real estate crises in the region. But the Gulf builders contend that everything is on track and their project will proceed as per plan.While the local real estate market is booming with the popularity of small housing projects initiated by local developers, investors in projects by property giants like Emaar Pakistan Pvt Ltd and Al Ghurair Giga Pakistan Pvt Ltd are worried about the status of their investments in both Islamabad and Karachi.One investor, requesting to remain anonymous shared that he had repeatedly visited the project site, only to see “barren land with a lot of machinery and work force carrying out tasks at a snail’s pace.

I have repeatedly inquired on the status of the venture and I am always assured that it would be completed on time. But I fail to understand how they would manage when my eyes tell me otherwise,” he expressed.On the other hand, an insider of the real estate industry informed that the UAE market is predicted to slump further and this will impact local projects taken up by these Gulf-based giants. He said “more projects would be cancelled and abandoned in the months to come and these are directly going to affect the projects in Pakistan too.”Referring to the UAE market, the source further stated that Emaar requires billions of Dirhams to complete their existing projects which they had planned to borrow from Abu Dhabi who have in turn asked for shares in the Emaar projects instead.“Similarly, other big developers such as Nakheel, Damac and Ruwad have laid off staff in massive numbers while shares of the real estate sector of UAE have plunged from as high as Dhs11 per share to a mere Dhs3 per share,” he informed.“The UAE developers that are here have been rumored to be planning to also lay off people or worse abandon projects and flee with the investors’ money” he continued. “The best bet in these times is caution, as the market is highly speculative right now.”

When The News contacted Chief Executive Officer of Emaar Pakistan, Dr Dia Malaeb, he denied any such news and said that they continue to believe in the Pakistani real estate market’s potential as the global financial meltdown had not affected this country as severely as the UAE market. He said that the projects that had already been launched would go ahead as planned and Emaar Pakistan would ensure that they are delivered to their investors on time and according to their agenda.Malaeb informed that their project Canyon Views in Islamabad is all set to be handed over to its investors in a few months’ time, whereas the work on The Highlands, also in Islamabad and Crescent Bay in Karachi continues to be completed as per the schedule.

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Dubai dream turns sour as job losses mount: Dawn

DUBAI: Dubai's rapid expansion in recent years provided jobs for millions. But the global financial meltdown has abruptly ended the dream for many people as more and more firms sack staff to cut costs.

Spectacular economic growth, spurred by a robust construction sector, lured people from far and wide to the booming city on the shores of the Gulf, tempted by high pay, low tax and -- for many Europeans -- the year-round sunshine.

Foreigners form most of the population in Dubai and with residency permits linked to employment many of the people who are losing their jobs face the added upheaval of leaving the country.

‘I don't feel that I was wronged. This is business... But I would have preferred a cut in my salary rather than being sacked,’ said an Arab man who was let go by government-controlled property group Nakheel.

Another former Nakheel employee: ‘Only four days before we were given the termination letter, our director told us in a meeting that the situation was very difficult and that the budget for our project had been cut by nearly three quarters.‘It was too quick,’ said the 30-year-old employee who was sacked at the end of November as one of 500 employees -- 15 per cent of the workforce -- who lost their jobs.

Nakheel has its fingerprints on most of Dubai's iconic projects, including three palm-shaped artificial islands and a cluster of islands in the shape of a world map.

It unveiled in early October another gigantic project to erect a one kilometre high tower, which, if ever built, would dwarf the unfinished Burj Dubai, currently standing around 700 metres (765 yards) high.

Property sold like hot cakes for the past few years but demand has slumped amid the global credit crunch as panicking investors and creditors fled the market.

All of sudden, the viability of the grandiose property projects has become questionable.
Nakheel's job cuts programme is one of the largest so far in the United Arab Emirates, but is far from the only one.

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