Emaar denies Saudi deal

Emaar denies Saudi deal

The property developer denied on Sunday that it will build Saudi’s kilometer-high tower. So much for yesterday’s market rally.

June 15, 2009 10:02 by Dana El Baltaji

Dubai-based Emaar Properties issued an email statement to Reuters denying it signed a deal with Saudi-owned Kingdom Holding Company to build a kilometer-high tower. “Emaar … will not invest in any projects of this sort,” the statement said, adding that it signed a contract with Jeddah Economic Company, and would “only offer management services for a real estate project against a fee.”

The statement comes after Kingdom Holding announced a “strategic” alliance with Emaar. “EMAAR are in charge of developing and supervising the construction of Jeddah Kingdom City land and Kingdom Tower, the highest in the world,” the statement said. “EMAAR was selected by Kingdom Holding from five other international developers, for their previous proven experience in the development of mega projects, their knowledge of the area and social setup.”

According to the statement, Mohammed bin Ali Al Abbar and V.K Gomber, chairman and CEO of Emaar respectively were present at the signing alongside Prince Alwaleed bin Talal bin Abdulaziz Alsaud, chairman of Kingdom Holding Company.

Calls to Emaar’s public relations department went unanswered.

News of the deal yesterday hoisted the Dubai Financial Market (DFM) to a seven-month high, with Emaar’s shares jumping 7.2 percent. The DFM General Index jumped 4.8 percent to 2,198.31.

Emaar’s statement, however, dragged its share price down by 4.3 percent in early trading on Monday.

According to Kingdom Holding’s official statement, Prince Alwaleed was present at the signing “on behalf Jeddah Economic Company.” Perhaps Emaar is clarifying that the deal it struck is with Jeddah Economic Company, and not with Kingdom Holding; although given the publicity the deal generated, that’s unlikely.

High profile denials of this magnitude are rare in the Gulf.

So is this a royal misunderstanding? And if so, will either Alabbar or Prince Alwaleed admit they misinterpreted the deal?