Local and international banks in Dubai will be able to finance the emirate’s ambitious real estate and hospitality projects despite concerns that lenders may be hesitant to fund them.
Dubai has announced a flurry of projects reminiscent of the heady days of the mid-2000s in recent months but Boston Consulting Group (BCG) said banks are unlikely to hold back funds through fear of a repeat of the emirate's property collapse in 2008-2009, when prices plunged by up to 60 percent.
New projects announced for Dubai include Mohammed bin Rashid City, which will include more than 100 hotels, a theme park and the world's largest shopping mall, as well as a new manmade island whose cost is valued at US$1.6bn. The announcements come amid double digit increases in passenger traffic through the emirate's airport to more than 58m, while consultancy STR Global estimates that 19,000 new hotel rooms will be added in the next few years.
“I think there should be enough liquidity available for financing this,” said Reinhold Leichtfuss, senior partner and managing director at BCG.
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