Dubai developer Emaar Properties closes Algeria office because of "lack of progress"
By: ADAM SCHRECK
Associated Press
07/06/09 9:30 AM EDT
DUBAI, UNITED ARAB EMIRATES — Shares of the Dubai developer building the world's tallest skyscraper extended their slide Sunday after the company shut an office overseeing $20 billion worth of real estate projects in Algeria.
Emaar Properties, the Middle East's biggest publicly traded real estate company, said in a statement posted on the Web site of the Dubai Financial Market that it shuttered the office because of "a lack of progress which is beyond the company's control."
It was not immediately clear how much of Emaar's Algeria operations would be affected by the move. The company said it remains open to long-term investment in the country, which it says "offers robust growth opportunities."
"Emaar will continue to invest in promising international projects that will add long-term value to the company's stakeholders," the company said. It could not be reached for additional comment.
Emaar is best known for building the nearly complete Burj Dubai, which has already topped out as the world's tallest building. It has also constructed some of Dubai's best-known luxury residential developments and the Middle East's biggest shopping mall.
The company said it would enter the Algerian market with four large property projects worth $20 billion in October 2007, at the height of a property boom in its home market. Plans called for a new city of luxury houses and a golf course, a tourist resort, a waterfront residential project and a healthcare campus. Each of the projects was to be located near the capital Algiers.
Emaar has faced trouble in other overseas markets as well. In February, the company's John Laing Homes division in the U.S. filed for bankruptcy protection, citing a weakening demand for new homes. A month later, Emaar said it would run its Indonesian operations from its Dubai headquarters rather than the capital Jakarta.
The Algeria announcement comes a week after Emaar laid out plans to merge with three property companies owned by Dubai's ruler. Emaar said the deal would create a company with an asset base of 194 billion dirhams ($52.8 billion) and a debt of 13.4 billion dirhams.
Investors have taken a dim view of the proposed tie-up, dragging Emaar's shares sharply lower since the deal was announced. One analyst, Bobby Sarkar of Dubai-based Al Mal Capital, has suspended his rating of the company because of concerns the deal could hurt existing shareholders.
Emaar shares tumbled 20 UAE fils, or 7.2 percent, to close at 2.60 dirhams (71 cents) Sunday.
