But even large developers are not immune to the global credit crisis and they too are not dismissing the need to merge, the Dubai Financial Centre Forum heard.
Emaar Properties, the Middle East's largest real estate developer, would welcome a merger with state-owned rival Nakheel if the opportunity arose, its chairman Mohamed Ali Alabbar said.
'Nakheel and Emaar are two separate entities, but we welcome collaboration. If there is a chance, I will welcome it,' he said at the conference.
He said small developers in Dubai would have to consolidate to weather the global financial crisis. You will see more consolidation among third-party developers, who are facing lending difficulties,' he added.
Alabbar said there were no current plans to merge the companies but if it came to a situation where in order to compete on the international stage then consolidation could not be ruled out.
Dubai-based Islamic mortgage lenders Amlak Finance and Tamweel are to merge under the government-owned Real Estate Bank, which itself is merging with fellow government-owned lender the Emirates Industrial Bank, to create the UAE's biggest home finance company.
Elsewhere in the Middle East the Qatar Navigation Company and Qatar Shipping Company said they had been ordered to merge by the Qatar government to boost investment growth and profitability.
Emirates NBD, the largest Gulf Arab lender by assets, was formed last year in an $11.3 billion government-brokered merger between Emirates Bank International and National Bank of Dubai (NBD).
