Dubai's Emaar suspends construction projects

Dubai

EMAAR Properties, the largest listed developer in the United Arab Emirates, has suspended work on major projects in Dubai amid a real-estate slowdown exacerbated by the novel coronavirus pandemic, sources familiar with the matter said.

Dubai's property market has struggled in the past decade due to the fallout from the global financial crisis and weak oil prices that have left the emirate oversupplied with homes and offices.

In the latest blow to the economy, the global virus outbreak prompted Dubai to propose a one-year delay to Expo, a major event that it was due to host from October.

Emaar is among the developers in the Middle East's business and logistics hub being forced to rethink projects as the pandemic and the oil-price collapse squeeze finances.

Emaar has suspended projects at Dubai Creek Harbour, a new development that was to build homes for 200,000 people.

That included suspending work on the Dubai Creek Harbour Tower, billed as being taller than Dubai's Burj Khalifa, which is now the world's tallest building.

Three of Emaar's listed companies will not pay dividends for 2019 in "view of the current circumstances".

Emaar has also sold 80 per cent of its Downtown Dubai district cooling business to Tabreed for US$675 million. Tabreed's biggest shareholder is French utility Engie.

Emaar, which built the Burj Khalifa, had said last month that it had suspended work on a luxury residential tower in a prime Dubai district, and had temporarily closed several hotels in the wake of the hit that the virus has dealt to tourism.

Separately, it was reported that Emaar chairman Mohamed Alabbar had forfeited his salary in full, while other staff would have had their salaries cut by as much as 50 per cent.

The changes took effect on April 1 for all of Emaar's Dubai businesses and will continue until further notice, said a letter sent by him to employees.

Middle management will take a 50 per cent reduction and junior staff, a 30 per cent cut. There will be no pay cut for support staff working full-time.

Staff not currently operating or on leave will receive full accommodation and healthcare as well as 15 per cent of their cash salary.

Those in other businesses will receive 60 per cent of their full salary. REUTERS, BLOOMBERG