International lenders did not disclose specificities, but said it was part of global cost-cutting plansNovember 26, 2015 11:32
Emaar’s merger: Will it change Dubai’s property scene?
Analysts argue that though the move is a positive one, it will not have an impact on the market in the short term.
June 28, 2009 1:21 by Aarti Nagraj
Emaar Properties’s merger with three Dubai government-owned developers – Dubai Holding, Sama Dubai and Tatweer – will create a conglomerate with that carries only AED13.4 billion ($3.65 billion) of debt, the developer said on Sunday.
Emaar’s shares fell 10 percent on Sunday, their biggest drop since November last year.
“Consolidating these three companies with Emaar is a natural progression in the evolution of the Dubai real estate landscape, providing benefits to all stakeholders,” Mohammed Al Gergawi, chairman of Dubai Holding, said in a joint statement with Emaar.
“Emaar and Dubai Holding […] with the assistance of their financial advisers, the Royal Bank of Scotland PLC and Merrill Lynch International respectively, are in the process of finalizing a thorough assessment of the merits of this proposed consolidation,” the statement said.
On Saturday, Emaar said in a separate statement that the merging process would take four months.
But will this merger affect Dubai’s property market?
“I think in the short run I don’t see much of a change,” explains Ryan Mahoney, the managing director of Dubai-based real estate agency, Better Homes. “The fact that they are merging doesn’t have a direct impact on supply, and won’t really have a direct impact on demand. There is a general opinion that the merger is in order to shore up finances and streamline management.”
“In this stage, we don’t know what that integrated unit is going to do,” he says, adding that the picture could change in the long term.
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