Sunland’s stake swap shows long recovery for Dubai
Australian Sunland’s stake swap is far from an encouraging move for the Dubai real estate landscape.
October 18, 2011 4:26 by p.deleon
Do you remember the Palazzo Versace in Dubai? Of course you do. It made headlines with its larger than life, read typical Dubaian, plans on having the world’s first air conditioned beach (complete with cooling pipes underneath the sand and giant fans). Ah, the memory is slowly coming back to you now, isn’t it?
Well, just this week news emerged that Sunland Group has pulled out of the project. The news comes five years after Sunland announced their involvement in the Dh2.3 billion project.
So here is the breakdown: Sunland will be exchanging its stakes in the Palazzo Versace hotel and the D1 residential tower, for 100 percent ownership of the Palazzo Versace Gold Coast hotel in Australia. Apparently there will be no cash involved in the deal.
For their part, Emirates Investment Holdings (Enshaa) has handed over its 49 percent share in the Gold Coast Palazzo in exchange for the Sunland’s 51 percent interest in the Palazzo Versace Dubai and 50 per cent share of the D1 tower.
It is a well known fact that the Versace Palazzo Dubai project has slowed down significantly, but what kind of implications will the stake swap have for Dubai’s real estate’s reputation? Surely it will do little to inspire confidence.
On the other hand, just this week The Waldorf Astoria announced plans to restart work on its Dh1 billion resort on the Dubai Palm. The Waldorf Astoria on the Palm, which is being built by Al Habtoor will be operated by Hilton under the Waldorf Astoria brand.
So will Sunland pulling out of Palazzo Versace be the stick that break’s Dubai commercial real estate’s back? Probably not, as the restarting of the Waldorf Astoria project very illustrates. The sector isn’t quite back to its pre-recession state, but it is surely warming up.