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Dubai island building project slows with economy |
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12/1/2008 9:10:01 AM |
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The Dubai state developer building palm-shaped islands off the city's coast said 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, AP reported.
Nakheel, which is owned by the emirate's government, said in an e-mailed statement that 500 employees have been laid off and it is scaling back work on some of its most ambitious island-building projects.
"Nakheel is delaying long-dated infrastructure work on some of our projects in order to ensure that our business model is aligned to meet market demand," the developer said. "We have the responsibility to adjust our short term business plans to accommodate the current global environment."
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 $20 million 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.
The company's continued success is seen as crucial for Dubai, one of seven semiautonomous states in the United Arab Emirates that has become a magnet for more than 1 million South Asian and other foreign workers.
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.
The company declined to say how many foreign workers — whose residency visas are typically tied to employment — were included in the round of cuts, but it did say laid-off employees would receive support packages that take into account "social, financial, and professional welfare."
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.
The layoffs follow a report by HSBC Holdings PLC that found home prices on Dubai's secondary market recently fell month-to-month for the first time since the city-state began allowing foreigners to buy property in 2002. The next report, due out soon, is expected to show a further slide.
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Source: News-en.trend.az |
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