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Tuesday, December 2, 2008

Dubai's island project slows down

CAIRO: The Dubai state developer building palm-shaped islands off the city's coast said on Sunday it has cut about 15 percent of its staff amid a work slowdown - the clearest sign yet that the Gulf's property boom is hurting from the global economic slump.

Nakheel, which is owned by the emirate's government, said in an emailed statement that 500 employees have been laid off and it is scaling back work on some of its most ambitious island-building projects.

In response to questions, the company said sales have slowed as a result of tighter liquidity globally and that buyers today - unlike the property-flipping speculators that helped fuel Dubai's rapid boom - "are more focused on long-term investment opportunities".

Speculation has been growing that Nakheel would be forced to curtail some of its plans even as the company put on a brave face in response to the worldwide slowdown.
Less than two weeks ago, the company's chairman co-hosted a US$20 million (US$1=RM3.63) red-carpet party to launch its first palm-shaped island and the Atlantis hotel located on it. Its hotel division last week welcomed the arrival of the storied cruise ship Queen Elizabeth 2, which will be turned into a floating hotel moored alongside the island, known as Palm Jumeirah.

Projects that Nakheel said it is delaying include a hotel being built with Donald Trump on the Palm Jumeirah, the only man-made island project the company has completed.

Work is also being slowed on the Waterfront and Palm Jebel Ali - two even larger archipelagoes being created in the Persian Gulf. Development of another series of islands arranged like the solar system will be restricted to preliminary engineering studies, Nakheel said.

A number of other Dubai developers have laid off staff in recent weeks, though none of the cuts have been as large as Nakheel's.



Juile said...

Hey why are we all cutting such a sorry figure, till last year only business was booming so if there is a down turn why crib so much things will get better soon. Have high hopes. Everyone from advertisers to real estate to avaiation is hit.

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Anonymous said...

Times have changed so much in just one year that spending $95 billion right now would seem unthinkable.