Nakheel’s plans to build the tallest tower in the world will not be stalled by a slowdown in the property market in Dubai, but the master developer has put on hold taking on new projects for the time being, chief executive Chris O’Donnell said.
With foundation work on the 1.4km-high skyscraper underway, the property market would be “moving positively” again by the time the foundations were complete within two to three years, O’Donnell told Arabian Business.
He said funding for the $38.12 billion project, unveiled last month, would be secured by the sale of land around the tower to other developers.
“We indicated when we launched that we would do the foundation work and that is underway and will take two or three years. My view is that within two or three years you will find the Dubai market well and truly moving positively.
"So we think that’s the right thing to do,” he said on Wednesday evening ahead of Nakheel taking delivery of the QE2, which it plans to transform into a hotel and tourist attraction off the eastern trunk side of Palm Jumeirah.
In response to a question of whether Nakheel was considering cutting jobs, O’Donnell said the Dubai-based firm was assessing the impact of the global financial crisis on its operations to “match resources to meet its workload.”
“We are reviewing the situation,” he said. “The world economic crisis is having an affect on Dubai and we are assessing what the impact is and what we are looking to do in the future is to match supply with demand. We will match our resources to meet the workload.”
Emaar Properties, another Dubai master developer, said on Monday it may consider making staff redundant due to the downturn in the local real estate market, while Omniyat Properties could cut up to 100 jobs and Dubai developer Damac has said that it planned to lay off 200 employees.
O’Donnell said following launches in the last year and a half of the Universe, Mina Rashid and Nakheel Tower, it was not taking on any new projects for the time being.
“We are delivering over 50 percent of everything that will be delivered in Dubai over the next ten years. We are managing sub-projects within our projects, so smaller projects within Palm Deira and Palm Jumeirah and the Waterfront,” he said.
He said $80 billion was the last figure Nakheel had given for the value of its projects including international assets and as this was a conservative estimate the amount was still correct despite the global financial crisis.
O’Donnell firmly denied there were any plans for a merger between Nakheel and Emaar.
“The government has come out and confirmed that is not the case, so there’s definitely no Nakheel and Emaar merger that’s being considered,” he said.
It follows a comment on Monday by Emaar chairman Mohamed Ali Alabbar saying he would welcome a merger with Nakheel if the opportunity arose.
Nakheel, part of state-owned conglomerate Dubai World, is building three palm-shaped islands off the Dubai coast, as well as an archipelago in the shape of the world.
The financial crisis has hit demand for real estate in Dubai from foreign investors, which make up a large percentage of buyers, while tightening liquidity has made home financing more difficult.
Developer Nakheel is to trump rival Emaar Properties in the contest to build the world's tallest building, with the Dubai-owned developer unveiling plans for a tower that will dwarf the Burj Dubai.
Nakheel is poised to build Nakheel Harbour and Tower that will be more than one kilometre high, as part of a $38.12 billion project that will include the world’s first inner city harbour.
This video gives you the behind the scenes story of the project with interviews with CEO Chris O'Donnell, a look at the company's launch night for the ambitious development which was held at the Atlantis resort in Dubai and attended by Hollywood couple Michael Douglas and Catherine Zeta Jone plus there's a 3D view of how the tower will look when complete.