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Dubai to see a slowdown in construction

It is part of a desperate attempt by real estate companies to improve cash flow as they come under fire for implementing severe job cuts and putting projects on hold.

Emaar Properties, which has already made at least a 100 people redundant, wants to introduce more flexible deadlines and relax property buyer's payment plans.

It is also diversifying away from luxury properties and has agreed a memorandum of understanding to build a $100 million city in Egypt that is aimed at low cost housing. The Sheikh Khalifa bin Zayed City will be funded by UAE President Sheikh Khalifa bin Zayed Al Nahyan, ruler of Abu Dhabi and will occupy an area of two million square metres, with health, education, entertainment and sports facilities on site.

Meanwhile Arabtec Construction said it is talking to clients about introducing longer construction schedules, under which developers would need at least another year to complete tower projects that currently take two years.

The extension would apply to low-rise residential and retail projects, chief executive Riad Kamal said. 'There was no reason for projects to be implemented at the speed at which they were,' he added.

We've asked them to review their cashflow and instruct us as to the speed they wish us to proceed to match the schedule of payments they expect from their buyers. And we are seeking to continuously review the situation together so we can guarantee everybody gets paid, including our subcontractors and suppliers.'

Kamal said developers had no choice but to be more realistic about project delivery because of the credit crunch. The revised timetables would mean tower projects of about 40 floors, which previously took an average of two years to complete, would take at least another year. The same amount of time would be needed for low-rise residential and retail projects.

'There's been a radical change in the last couple of months,' said Kez Taylor, the managing director of Al Jaber Engineering and Contracting. He confirmed that work on its $926 million World Trade Centre contract had been 're-phased' but the project was fully going ahead.

'You can still roll a project out, but it might mean extending the contract period to suit the cashflow situation of the developer. As a contractor, you have to be sensitive to the situation. You've got to try and work with developers to find a solution that suits the current scenario,' he added.

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