Dubai debt won't harm real estate, says developer

Dubai Pearl chairman says Dubai World structuring won't affect market

Dubai Pearl's chairman says restructuring is 'normal'
Dubai Pearl's chairman says restructuring is 'normal'

Dubai’s recent US $26 billion debt restructuring announcement will not affect the emirate’s real estate market, a leading property developer said on Monday.

“It will have no significance because restructuring is a normal word,” Abdul Majeed Ismail Al Fahim, chairman of Dubai Pearl, told Arabian Business.

Residential property prices in Dubai increased by 7% during the third quarter, the first increase since they started plummeting last year amid the downturn, according to Colliers International

Dubai Pearl was taken over by a consortium of investors by the Al Fahim Group in 2007 following delays led by the Dubai Technology, e-Commerce & Media Free Zone (Tecom), the zone in which the project is located.

Al Fahim said he had restructured payments for the project’s end-users amid the downturn. “We have done two things for our investors,” he said. “We have reduced the aggregate amount and also extended timing [of payments] over a longer period of time. “

The mixed-used development, overlooking the Palm Jumeirah, was originally valued at $2.5 billion (AED 9 billion) but is now valued at $4 billion.

In May, MGM Mirage said it would run three hotels including a 250-room Bellagio hotel and a 350-room MGM Grand Hotel on the development.

In October 2008, Dubai Pearl paid $27.2 million for Archangel, a 1.6 million sq ft island located on Nakheel’s World development. Once complete, the island will be for the exclusive use of Dubai Pearl residents, according to the firm.

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