FINANCIAL NEWS

Analysts: Dubai deal has little impact on realty sector

21 May 2010

(MENAFN) Analysts said that Dubai’s deal on restructuring its $23.5 billion debt is expected to do little to kick-start lending in the emirate’s ailing property market, or ease the main concern of constant oversupply, Reuters reported.

Debt-laden Dubai World announced that it had reached an agreement in principal to restructure its debt with core bank creditors.

An analyst at Nomura in Dubai, said that the Dubai World deal adds only a little bit of comfort but there is still a crisis of confidence in terms of real estate. The analyst said that banks are not expected to start to take comfort in their loan books and comfort in real estate and start lending again to end-users and project finance.

Dubai sent global markets into chaos at the end of last year when the conglomerate asked creditors for a standstill on debt mainly linked to its two real estate firms Nakheel and Limitless World.

Confidence in the emirate’s property sector took a hit in late 2008 when the global economic crisis saw house prices there plunge some 60 percent from their peaks.

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