Author: Gordon Platt



By Gordon Platt



Dubai Mall: Mixed fortunes for Dubai’s property sector

Abu Dhabi Investment Authority, the world's biggest sovereign wealth fund, has purchased an approximately 15% stake in London's Gatwick Airport, although it would not confirm the exact size of the holding or the price paid. Sovereign wealth funds have become major investors in global infrastructure, although the market is limited, since some countries do not allow foreign investments in what they consider to be strategic assets.

The Abu Dhabi fund, with assets of nearly $700 billion, bought its stake in London's second-largest airport from Global Infrastructure Partners (GIP), a fund set up by Credit Suisse and General Electric. GIP bought Gatwick last year from British Airports Authority, which is majority owned by Spain-based builder Ferrovial.

In Dubai, Emaar Properties, which built the 200-story Burj Khalifa, the tallest building in the world, is setting its sights on more modest edifices for future growth. In announcing a profit of $196 million for the fourth quarter of 2009, the Middle East's biggest developer said it would focus on middle-income housing in fast-growing emerging markets such as India, Pakistan and Egypt.

Emaar, which is 31% owned by Dubai's ruling Maktoum family, canceled a merger last year with the property units of debt-laden Dubai Holding. The latter company, which is owned by Sheikh Mohammed bin Rashid Al Maktoum, the emirate's ruler, is seeking to sell non-core assets to chip away at a $100 billion debt mountain. Emaar itself is looking to sell its majority holding in Singapore-based retailer RSH.

Emaar, which opened two new hotels in Dubai last year, says the hospitality sector contributed to a near doubling of its income in the fourth quarter of 2009. Emaar also opened the Dubai Mall last year, a shopping center that attracted more than 37 million visitors.

Dubai-based Arabtec was recently awarded the construction contract by Al Fajr for the five-star Yasmeen Rotana Hotel in Syria. Arabtec has nearly completed building the Eighth Gate, a commercial and residential project in Damascus, for Emaar Syria.