Indian development in jeopardy

The future of an £8 billion mixed use development in India is in doubt as the Dubai developer involves considers pulling out...

Limitless, the global master development arm of Dubai World, confirmed it is not able to go ahead with the project in Bidadi Knowledge City near Bangalore and a spokesman said it was because it has not been able to acquire the necessary land rather than a result of the credit crunch.

But, at the same time, the company confirmed that it is making a seven per cent reduction in global headcount as a result of the current economic situation and that 38 staff are being made redundant.

Limitless has also delayed a key contract on its £40.8 billion Arabian Canal project. The awarding of the contract for Phase two of development has been cancelled but it said that work was continuing on Phase one of the canal.

'We have made a difficult but necessary decision in response to current market conditions. As a responsible developer, we must adjust to and work around the situation by prioritising our investments, reviewing the pace of our developments and enhancing productivity. Unfortunately, this means taking the painful step of laying off a small proportion of staff,' said Rebecca Rees, Corporate Media Relations Manager at Limitless.

'Downturns do not last forever. We remain committed to our projects and optimistic about the long term outlook for the real estate sector. Most of our developments are long term, large scale projects, constructed over eight years, on average, so we can adjust the pace of development taking into account market conditions, which will inevitably fluctuate in that time,' she added.

The problems over the India project also affect one of India's biggest developers DLF. Limitless and DLF won the bid to build Bidadi in October 2007. Under the agreement, Government agencies were responsible for the land acquisition.

'Unfortunately, after 18 months the land acquisition has not advanced. As a result, Limitless and DLF have notified the Government that they are reconsidering their position,' Rees confirmed.

'Limitless remains optimistic about India as a future market, and will continue to explore viable opportunities there,' she added.

The company's property portfolio includes projects in Jordan, Saudi Arabia, Russia, India, Malaysia and Vietnam.

Source: www.propertywire.com