Rumours and the grapevine in the Gulf's construction industry
In the last few weeks, three Gulf construction outfits have shown how to manage incorrect market rumours and gossip
The Gulf construction sector’s rumour mill has been busy these past few weeks. First, it was reported that Dubai-listed developer Deyaar had won a legal case against fellow real estate firm Nakheel. Deyaar was in the news again when it was reported by some media outlets to be considering a merger with Union Properties, another real estate company listed on the Dubai bourse.
On 20 September, Deyaar issued a statement to the Dubai Financial Market (DFM) refuting claims made online that it had won a legal case against the developer behind Dubai’s Palm Jumeirah island. A final decision is still pending in Deyaar’s case against Limitless – a fellow company of Nakheel’s – and in its statement, Deyaar said that it would disclose the outcome of the final judgments after the courts had reached a decision.
In a missive issued to DFM on 24 September, Union Properties said the news being “circulated through media about a merger” was incorrect. “The management of [Union Properties] would like to point out that it is currently not considering any merger,” the firm stated.
While no English media links to the reports were available at the time, some Arabic media sources had reported Deyaar as the merger partner for Union Properties.
But the construction grapevine has not stopped there, and Saudi Arabia has also seen a high-profile case of incorrect reportage this month.
Reports of Saudi Arabia cancelling the $200bn (SAR750bn) Solar Power Project 2030 with Japan’s Softbank were “inaccurate”, the Public Investment Fund (PIF) said on 2 October. Referring to the original report by the Wall Street Journal, a PIF spokesperson said the fund – led by Crown Prince Mohammed Bin Salman – continues to work with Softbank Vision Fund, and other parties, “on a number of large-scale, multibillion-dollar projects relating to the solar industry”.
Reuters reported on 1 October, citing Wall Street Journal’s article, that the project had been “shelved”, and that no one was currently working on the development.
Media-shy construction firms are not uncommon, either globally or in the Middle East, and rumours tend to fly in times of increased market activity. However, an unmanaged grapevine can cause severe damage to a company’s operations and reputation. These situations also shed light on what premium – if any at all – a company places on business transparency. After all, how will the right business partner or client find you if your work is not clearly communicated to the market?
The recent instances of miscommunication are an opportunity for regional construction bosses to learn about the qualitative and quantitative benefits of establishing proper communication channels – within their own industry, and with the media. Proactive firms such as Deyaar, Union Properties, and the PIF are leading the way – can you keep up?