This article is from the Australian Property Journal archive
NAKHEEL Property Group, led by former Investa CEO Chris O'Donnell, is scaling back activity, laying off 500 workers and suspending work on the $2.9 billion Trump Tower.
The Dubai Government backed corporation has also scaled back construction of the Palm Deira project which was planned to house one million people.
The region which has boomed in the past decade thanks to cheap labour and endless funds is finally grappling with the current global credit crisis.
Recently the head of the region’s Real Estate Regulatory Authority told reporters that Dubai is witnessing heightened number of defaults for high-end properties.
“There are more and more defaults on the high end, if banks do not give mortgages,”
Yesterday the Al Habtoor Leighton Group announced that the joint venture including Murray and Roberts, hired in July this year to construct the $2.9 billion Trump Tower, have suspended works.
The project is worth $1.45 billion to Al Habtoor Leighton.
But Leighton said the company is not out of pocket. JV partner Murray and Roberts have incurred the costs to date.
Leighton added that the suspension will not have a material impact on its results, given the recent securing of the $8.85 billion Dubai Pearly project and the $3 billion Zayed University project in Abu Dhabi.
Australian Property Journal
