Monday, Jul 11, 2011

(This story was originally published Sunday.)

DUBAI (Zawya Dow Jones)--Tourism Development and Investment Co., the Abu Dhabi government-owned real estate and resort developer, reduced by 28% its budgeted spending for the year by putting on hold, or scaling back, projects, according to a company bond prospectus.

A strategy approved in December 2010 by TDIC's board on "selectively hibernating, delaying or scaling-back certain projects" has reduced the company's total budgeted capital expenditure for 2011 to 13.4 billion U.A.E. dirhams ($3.65 billion), from AED18.6 billion, the document dated June 29 says. "In light of the size and variety of the projects in its pipeline, it is impractical for TDIC to develop each of its projects simultaneously," the document says.

None of the projects being "hibernated" are under construction, it says, with TDIC monitoring Abu Dhabi's real estate market to assess when to resume developing projects.

TDIC in late June hired BNP Paribas, HSBC, National Bank of Abu Dhabi, Royal Bank of Scotland, and Standard Chartered Bank to arrange a series of fixed income meetings, which began in the U.A.E. on Sunday. The company, which has 69 projects under various stages of design and development, has a $3 billion Global Medium Term Note Program.

Its projects include Abu Dhabi's Saadiyat Island, which will host branches of the Guggenhim and Louvre museums in the oil-rich emirate. TDIC is one of a handful of government-owned companies investing to help diversify Abu Dhabi's economy away from oil income. The prospectus says Abu Dhabi's long-term strategy remains in place, but that the government "is focusing on ensuring that financial discipline is maintained" and seeing which projects can be deferred.

TDIC made a net loss of AED1.15 billion in 2010, roughly double its loss of AED551 million in 2009, according to an income statement in the prospectus. Revenues last year, however, rose to AED347.2 million from AED235.1 million in the previous year as hospitality revenues from one of its resorts increased.

TDIC hasn't yet recognized any revenue from selling residential projects, even those which have been pre-sold, as it only recognizes revenue when an individual property is completed and handed over.

-By Nour Malas, Dow Jones Newswires; +971502890223, nour.malas@dowjones.com

Copyright (c) 2011 Dow Jones & Co.

(END) Dow Jones Newswires

11-07-11 0349GMT