TWO DUBAI INVESTORS, Damac Properties and Dubai World, have cancelled their investments in Malaysia. That Dubai has not fully recovered from the current global economic crisis was the reason why its investors cancelled their participation in overseas projects and focus on projects in their home country. Indeed, the global crisis has very seriously affected Dubai. Although its assets reached US$45 billion including projects in the United Arab Emirates, Egypt, Iraq, Jordan, Lebanon and Saudi Arabia, Damac Properties, a renowned developer in Dubai, the global crisis forced it to cut 250 jobs. Damac Properties has officially withdrawn its participation agreement for a port and marina development project in Malaysia.
Its agreement with Malaysia’s UEM Land for building the so-called Nusajaya project in Iskandar that reached US$122 million, was signed before the emergence of the global crisis. That Dubai’s economy still cannot recover from the crisis was the reason why Damac Properties withdrew from the Nusajaya project. Its spokesperson said, “This decision has been made in light of changes in the global financial market and an overall slowdown in the property market worldwide. Damac Properties has already announced its intention to focus on projects that are already under construction and this decision forms part of that strategy.”
For Damac, however, there is still possibility for it to return to Malaysia when the market condition has got better. Despite the withdrawal of Damac Properties, UEM Land said it would complete the Nusajaya project. Three of its buildings are planned to be completed by the end of this year. For this, UEM Land is expecting local and international investors to replace Damac Properties.
Wan Abdullah Wan Ibrahime, Managing Director of UEM Land said, “We are also actively making new contacts with other parties. We need investors to create the critical mass and excitement.” Investors can see that at the moment the value of Nusajaya project has increased from RM205 to RM250 per sq. meters for its apartment blocks that look out on the port, hotels and family amusement centers. UEM Land remains optimistic investors will come but it added that they would prefer investing in Nusajaya only after its construction work has been completed.
As regards Dubai World, it signed cooperation agreement with MMC Corporation in 2007 to build a maritime center in southern Johor that covers an oil terminal, a shipyard, cargo handling facilities, logistic warehouses and property estates. Together, they will occupy 912 hectares of land, which have a total value of $4.5 billion. Like Damac Properties, the global crisis forced Dubai World to withdraw from Malaysia.
According to Dubai World Chairman Sultan bin Sulayem, in May it decided to complete all projects under construction and delay any new project plans. In early August, Dubai World also delayed several projects in other countries like a tourist project in Africa that was worth $1.5 billion. The company also postponed six of its eight projects in Rwanda that totaled $230 million. Cooperation agreements for the projects were signed in October 2007. (NS)