It will now concentrate on projects that are already under construction and is a further sign that Middle East developers have to reign back on ambitious global goals.
At the height of the property boom in the region Damac signed a $122 million sales and purchase agreement with state developer UEM land to develop the Nusajaya project in Iskandar, Malaysia.
'This decision has been made in light of changes in the global financial market and an overall slowdown in the property market worldwide,' Damac said in a statement.
'Damac Properties has already announced its intention to focus on projects that are already under construction and this decision forms part of that strategy,' the statement added.
UEM Land said it will continue with the project and it expects three buildings to be complete by the end of the year. But it will prove costly for investors as the price has been increased from RM205 per square foot from RM250 for the waterfront apartment block, hotel and family entertainment centre.
Meanwhile it is looking for major investment in the project. 'We need investors to create the critical mass and excitement. Nonetheless, we believe investors will have more confidence to invest in Nusajaya once these three buildings are up,' said managing director Wan Abdullah Wan Ibrahimhe.
The company is in talks with potential local and overseas developers, including from Australia and Singapore, to take over Damac's place. 'We are also actively making new contacts with other parties,' he added.
Damac, which has cut at least 250 jobs since the start of the economic downturn, has properties worth more than $45 billion including projects in the United Arab Emirates, Egypt, Iraq, Jordan, Lebanon, and Saudi Arabia. It has not ruled out developing other projects in Malaysia in the future if market conditions improve.
