“The worst of news has seen cancellations of entire projects, even though they appeared at advanced stages of construction,” the bank said in a note on Arabtec Holding, one of Dubai’s largest construction firms.
HSBC says the most cancelled or delayed projects are high-end residential and commercial developments.
As Dubai’s once-booming real estate market slumps amid falling sales and tightening financing, developers are being forced to review project requirements.
In its report, HSBC lists 59 projects that are currently under review, including eight that have been cancelled – two of which were being developed by Damac Properties, one of the Middle East’s largest private developers.
Amongst the companies to cancel or delay a number of projects is government-owned developer Nakheel with six projects on hold, including its Palm Deira project and the $ 790mn Trump Tower project on Dubai’s Palm Jumeirah.
Nakheel said in January that it was postponing construction on its Nakheel Harbour & Tower, a 1km-tall tower slated to be the world’s tallest. Nakheel said the company was re-adjusting its plans “to better reflect the current market trends and match supply with demand.”
In November, Limitless, another government-backed developer, said it was reviewing the pace of a $ 61bn canal development.
In December, the government-backed developer Meraas said it was taking another look at the phasing and rollout of a $ 95bn re-development programme in the heart of Dubai.
The HSBC report says a number of projects at the $ 110bn Dubailand development, which was destined to be the pinnacle of the emirate’s tourism draw, have been cancelled, including The Falcon City of Wonders project that was to include a replica of the Eiffel Tower, the Tower of Pisa and the Taj Mahal among other “wonders” of the world.
