PERE went to press just a week after Dubai World, Dubai’s state-owned conglomerate with $59 billion of liabilities, said it would ask for an extension to a number of its debt maturities, including $3.5 billion of Islamic bonds due to be repaid in December. The announcement, made just ahead of the Eid holiday, caused a furore of debate about the consequences for the region and the wider economy.
Here we present a handful of early reactions to help decide just how damaging Dubai World’s decision really will be?
Desert storm
Harm Meijer, real estate analyst, JPMorgan: “Property prices are recovering around the world, but jumps look too strong in certain areas and this event may make investors think: beware of castles made of sand.”
David Swan, managing director at WW Advisors, the Kuwaiti-backed and Saudi funded real estate advisor: “Dubai World’s actions have damaged Dubai more than anything else. It is a PR disaster, given the timing and the way the news was delivered to coincide with Eid. There still seems to be little communication and this has continued to drag down the GCC markets. Other GCC countries, with aspirations to become the regions financial centre are likely to benefit from this crisis.”
Khuram Maqsood, managing director of European merchant bank Emirates Capital, quoted by Reuters: “Dubai World desperately needs cash. Everything is for sale. I don’t think anything is sacred in the current environment.”
Chris de Pury, commercial real estate partner at law firm Berwin Leighton Paisner: “The news of Dubai World raises some serious questions about where the global economy truly is at the present time and, most importantly, the effect this will have on market sentiment. The question now is the extent of the drag on the wider gloal economy.”
Storm in a tea cup
Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai, quoted in the Financial Times replying to “international investors” concerns over the fallout of Dubai World’s request: “They do not understand anything.”
Mohammad Ali Yasin, chief executive, Shuaa Securities, the brokerage division of Shuaa Capital, as quoted by Reuters: “What's important for people in the investment community is not to speculate: we shouldn't expect anybody to bail anybody out. It is a commercial decision, done on commercial terms.”
Michael Atwell, head of Middle East Operations, Cushman & Wakefield: “We are not surprised. The debt situation with Dubai World is well known. Everyone is concerned about it but the repercussions are yet to come through. As yet we haven’t seen any impact on the real estate market (in Dubai). Obviously if Nakheel is restructured and some assets are sold off there might well be some implications but at the moment it is business as usual.”
Vicky Kapur, editor of special projects, Emirates Business: “That (Dubai) could literally bring global markets crashing with what would have been an insignificant announcement in the pre-crisis era is downright ludicrous. Any reasonable investor would – and should – know that Dubai World is a Dubai government-owned holding company; it isn't the Dubai Government.”
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: 
