Abu Dhabi, the oil-rich sheikhdom that spent 36 billion dirhams ($9.8 billion) bailing out its biggest developer in 2011, will probably reach for its checkbook again as property companies in the United Arab Emirates face a stalled market and deadlines to repay debt.
“It’s fair to think of Abu Dhabi as a backstop in a worst- case scenario, because a big default would be too tough of an option now and would damage confidence,” said Saud Masud, an analyst at Dubai-based Rasmala Investment Bank Ltd. “A real- estate recovery could take a long time, even if the bottom was hit in the next 12 months.”
Abu Dhabi, holder of 7 percent of the world’s proven oil reserves, contributed to a $20 billion financial rescue of neighboring Dubai in 2009 and bailed out developer Aldar PJSC twice last year. While the sheikhdom’s cash will help property companies stay solvent, many will struggle to revive profit as Dubai’s real-estate slump stretches into its fourth year and Abu Dhabi puts large parts of its redevelopment plan on hold.
what do you think will happened after this? is this a good news or bad news for property owner?
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