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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
“As one large body, they potentially have greater control over a much greater amount of stocks. In the future we may see unified launches, unified pricing, and those kinds of things that will have an impact on the market.”
So are mergers the way forward for the industry?
Mahoney says that he hasn’t heard of any other mergers in the city’s property market, but argues that there are pros and cons to consolidation:
“Some people would say that merging has great advantages because you achieve economies of scale. And there’s no doubt that’s true. But then other people would argue that very, very large organizations have a lot of bureaucracy, and sometimes it’s difficult for such large organizations to react quickly to market changes, be dynamic and so forth.”
But Mahoney says that the move by Emaar and Dubai Holding is a good one.
“I think if anything the fact that there’s direction on what’s happening is a good thing. Some of the developers have stalled development on many projects, and there’s no real information on what they are doing, and how things are going to happen and so forth,” he says. “So the fact that there is now a move and there’s been a concrete step in terms of what’s going to happen will give people more confidence.”
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