World's tallest tower Burj Khalifa 828m high
Dubai, January 4, 2010
Dubai's ruler Sheikh Mohammed bin Rashid Al-Maktoum officially inaugurated the world's tallest structure Burj Dubai (standing at 828 metres high) and renamed it as Burj Khalifa after the UAE president and ruler of the neighboring emirate of Abu Dhabi.
Sheikh Mohammed, who is also the UAE Vice President and Prime Minister, unveiled a plaque and gave a brief speech during which he renamed the building as 'Burj Khalifa.'
According to a giant screen at the opening ceremony, Burj Khalifa measures 828 metres (2,717 feet), overtaking Taipei 101, its Taiwanese predecessor which is 508 metres high.
The developer Emaar Properties said on Monday the opening marked the completion of the last of its big local landmark projects and the start of a new strategy which is expected to focus on overseas projects, hotels and hospitals.
'We will be focusing on our subsidiaries - hospitals and hospitality - which will create a lot of revenues for Emaar and also work on wherever we have started projects (overseas),' Issam Galadari, chief executive of Emaar Dubai said.
Emaar, 31.2 per cent owned by the Dubai government, is the Arab world's largest listed developer, but is less indebted than other Dubai property firms, with about Dh8.1 billion ($2.21 billion) of loans and borrowings outstanding as of September 2009 of which about half is due this year.
Last year it posted a 53 per cent rise in third-quarter net operating profit to Dh655 million, beating most analysts' forecasts, on higher sales of its high-end properties. Revenue in the third quarter was Dh1.95 billion ($531 million).
The performance contrasted with that of troubled compatriot Nakheel which has seen earnings collapse and its liabilities rise to $20 billion.
Following Monday's opening, the $1.5 billion tower's first residents are due to move in next month and Emaar's chairman, Mohammed Alabbar, said 90 per cent of the properties in the tower have been sold, the firm is set to get a 10 percent yield on its investment and the completion will boost earnings in 2010.
'It will have a positive impact on the first, second and third quarters of this year,' Alabbar said while standing at the foot of the more than 800-metre high tower.
Roy Cherry, vice president of research for real estate and construction at Shuaa Capital said he expected Emaar's 2010 revenue to approach Dh10 billion, implying a growth of about 25 per cent on the investment bank's 2009 forecast.
Emaar's shares are down 74 per cent since hitting a 21-month high on January 6, 2008 as Dubai's once booming real estate sector crashed with property prices falling by around 50 per cent. Its shares closed down 3.4 per cent at Dh4.02 on Monday.
'Emaar's story has been about Dubai and the high end (of the property market). It has been a survivor after the two main developers Nakheel and Dubai Properties,' Saud Masud, UBS's head of research and senior real estate analyst for the Middle East and North Africa.
'I don't think we need anymore high-end. I don't think there is demand for it to justify premiums going forward,' he added.
Emaar executives were bullish on Monday, saying the emirate's property prices have stabilised, despite expectations the downward cycle could see a further 30 per cent fall in prices and new property completions in Dubai continuing to increase over the next 18 months.
Galadari said he expected 2010 to remain challenging for the company but plans to press ahead with the construction and operation of hospitals and hotels across the Middle East and North Africa region, the Indian Subcontinent and South East Asia and Europe.
Emaar has a joint venture with Italian fashion house Georgio Armani to develop hotels around the world and opened in 2008 the world's biggest shopping centre, Dubai Mall.
'Dubai is where our life is. We have a beautiful long-term development in Dubai, but we owe it to every single city that we work in (to continue development),' Alabbar said.
Emaar will turn to projects in India, Egypt and Saudi Arabia primarily as it looks to boost revenue in the future.
It signed an initial agreement earlier this year with Saudi billionaire Prince Alwaleed bin Talal to build an even taller tower than Burj Dubai near Jeddah and is developing a $26 billion city in the country.
Emaar pulled out of a $20 billion development in Algeria in 2009 but has moved ahead with other projects including a $4 billion development located at the highest point of downtown Cairo, and a new commercial district in Syria which will house the country's new stock exchange headquarters.
'In terms of replicating what they did in Dubai you have to question how they will do it again in foreign markets where competition will be greater, margins will be lower and you have to evolve on top of mitigating the downside risk in the core market,' Masud said.-Reuters