Summary of Cityscape Dubai 2008 day 1

Gulf Arab property firms launched $100 billion of new projects on Monday, but the news failed to restore investor confidence as fears grew that the global credit crunch is biting and the local real estate market overheating.

From a 350 billion UAE dirhams ($95 billion) beachfront project to a kilometre-high tower, developers at Dubai’s annual Cityscape exhibition launched the usual raft of mega-developments that have propelled the Gulf Arab commercial hub to international fame.

Dubai mortgage lender Tamweel TAML.DU said it would launch up to 2 billion dirhams of Islamic bonds in 2009 despite the liquidity squeeze gripping world markets and Abu Dhabi’s Sorouh Real Estate SOR.AD said all its projects were on target.

But investors in the United Arab Emirates shrugged off the upbeat news to extend weeks of declines, with shares in Emaar Properties EMAR.DU ending 10.7 percent down while Aldar Properties ALDR.AD and Sorouh SOR.AD lost more than 9 percent.

And Kuwait’s Abyaar Real Estate (ABYR.KW: Quote, Profile, Research, Stock Buzz) postponed the sale of its $1 billion Islamic bond due to the global credit crunch.

“The UAE is not an isolated link from the chain, from the global financial system,” said Sorouh CEO Mounir Haidar.

“However the UAE does enjoy slightly different dynamics. The UAE is an emerging economy and demand is strong. Economic policy is encouraging for people to invest in the region.”

Reuters