Property in Dubai
Dubai Holding announces consolidation
In its latest attempt to cope with the impact of economic crisis, the Dubai Holding has announced that it plans major re-organizing of big Gulf businesses.
The state-owned firm has revealed that it plans to condense seven of its units into four – property, hospitality, business parks and investments.
The Chief Executive of the Company, Ahmad bin Byat, in his statement, said that the realities of the global economic situation has made it necessary to view the company portfolio in a different way.
Declining to specify whether the restructuring would involve job cuts, a representative of the company mentioned that the global financial crisis has brought to an end the Dubai real estate boom, prompting developers to cancel numerous projects, leading to several thousand redundancies.
The restructuring coincides with the emirate’s plan to reanimate its economy, as the global economic downturn has curtailed access to cheap finance, while also, lowering oil prices have cut revenues.
The Dubai government has introduced several measures, aimed at strengthening entities such as Dubai Holding.
Among the Dubai Holdings’ firms, are Tecom Investments, Tatweer, leisure and theme park developer, and the Investment firm Dubai International Capital.
Three of the real estate units at Dubai Holdings are discussing merger with the leading developer, Emaar Properties. Dubai Holding has announced its plan to merge back-office operations at Sama Dubai, Dubai Properties and Mizin, to cut costs.
Established in 2004, Dubai Holding had consolidated several companies that the emirate used to spearhead. Jumeirah Group, a Dubai Holding company, operates few of the most exclusive hotels in the emirate, including the Burj Al Arab, and manages luxury hotels in New York and London.
“Bringing together the portfolio of the companies into these four categories, it has helped in building the existing strengths by aligning complimentary businesses. The businesses are able to take advantage of the diverse expertise within Dubai Holding like never before,” said bin Byat.
The Chief Economist at Standard Chartered Bank, Marios Maratheftis, said that consolidation is expected to continue as growth rates are not reaching the levels of previous years, and hence the consolidation is justified.
Posted on 20/8/2009