Saturday, Nov 21, 2009
(This story was originally published Friday.)
DUBAI (Zawya Dow Jones)--Emaar Properties PJSC's (EMAAR.DFM) planned merger with Dubai Properties will benefit shareholders, despite being delayed, the company's chairman said Friday.
"Emaar made sure this merger works for (us)... and the well-being of our shareholders," Mohamed Al Abbar told reporters on the sidelines of the World Economic Forum.
In June, Emaar announced plans to merge with Dubai Holding's real-estate units - Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC - to help absorb the impact of the collapse of the emirate's real-estate market where prices have tumbled up to 50%.
Al Abbar admitted that the merger between is running late, but that this was to ensure "we do a good job."
Dubai government-owned companies are under pressure to restructure as the emirate struggles to bolster an economy coping with the fallout from the global financial crisis and rising cost of financing its debt pile.
The opening of the world's tallest tower Burj Dubai has been pushed back by one month until Jan. 4 2010, Emaar Properties, said earlier this month.
The tower stands at the heart of $20 billion flagship Downtown development close to Dubai's main business district.
The Burj Dubai tower has a rate of return of "just below 10%," Al Abbar said, although he didn't specify a time frame.
He added that despite the high cost of building the Burj, the project will drive real estate prices up and attract more tourists, adding intrinsic value to the emirate.
When asked by reporters for his forecast on Dubai property prices, Al Abbar was positive.
"There is no more supply in the market and prices are coming down to a reasonable level," he said.
-By Maria Abi-Habib, Dow Jones Newswires; +9714-364-4962; maria.habib@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
21-11-09 0609GMT