Delays in abu dhabi

Abu Dhabi's second largest property developer is delaying new projects until current developments are complete because of the economic downturn...

It is a sign that the general decline in the real estate sector that has hit the emirate's neighbouring Dubai is clearly being keenly felt in Abu Dhabi.

Sorouh said it was not good business sense to launch new projects when current ones are not yet sold. 'Why would we want to launch something when the market is stressed out? It is prudent for developers to exhaust current stock before launching new ones,' said Chief Property Development officer Gurjit Singh.

Gurjit, who oversees a £13.3 billion portfolio in the UAE and abroad, declined to give details about new projects. 'The projects we haven't launched yet will be more meticulously and better planned, they will have a sharper focus on cost management,' he said.

Although analysts feel the Abu Dhabi property market will perform better than Dubai this year, the UAE's richest emirate is not immune from the international crisis.

Singh said property prices in Abu Dhabi were down 10 to 15 per cent compared to this time last year and that he expected values to slide a further five per cent in the next six months.

Limited supply and high demand would continue to push rents up, which were 20-25 percent higher than Dubai, Singh added.

While stressing that Sorouh had raised enough funding to complete all developments currently under construction, Singh said the company could look to raise debt this year.

'We will borrow from the banks and go to the debt markets as and when we need. It will be challenging as the global financial markets are still quite stressed,' he explained.

In July the developer issued £756 million worth of Islamic bonds to finance its Shams Abu Dhabi and Saraya projects-both parts of the company's massive 633 hectare scheme on Al Reem Island.

Source: www.propertywire.com