Emaar recently announced that Burj 29 Boulevard, situated close to Burj Khalifa, will be delayed two years, while Claren One, also scheduled for completion in February 2010, will be delayed one year.

Footage from the scene shows water flowing into the mall.

A lavish presentation witnessed by Dubai’s ruler and thousands of onlookers at the base of the tower said the building was 828 meters, or 2717 feet, tall.

Dubai is opening the tower in the midst of a deep financial crisis. Its oil rich neighbor Abu Dhabi has pumped billions of dollars in bailout funds into the emirate as it struggles to pay its debts.

Sheik Khalifa bin Zayed Al Nahyan is the ruler of Abu Dhabi and serves as the president of the United Arab Emirates, the federation of seven small emirates, including Dubai and Abu Dhabi.

Analysts have questioned what Dubai might need to offer in exchange for the financial support it has received from Abu Dhabi, which controls nearly all of the UAE’s oil wealth. Abu Dhabi provided direct and indirect injections totaling $25 billion last year as Dubai’s debt problems deepened.

Dubai’s hereditary ruler, Sheik Mohammed bin Rashid Al Maktoum, in recent months has increasingly underscored the close relationship between the two emirates. Sheik Mohammed serves as vice president and prime minister of the UAE federation.

Emaar, the developer of the newly opened tower, said it cost about $1.5 billion to build the tapering metal-and-glass spire billed as a “vertical city” of luxury apartments and offices. It boasts four swimming pools, a private library and a hotel designed by Giorgio Armani.

Emaar’s Alabbar said the landmark Burj is 90 percent sold in a mix of residential units, offices and other space, offering a counterpoint to Dubai’s financial woes.

The developer has only said the spire stands more than 2625 feet (800 meters) tall. Alabbar said Dubai’s ruler will announce the height at the inauguration ceremony.

At a reported height of 2,684 feet (818 meters), the Burj Dubai long ago vanquished its nearest rival, the Taipei 101 in Taiwan. But the tower’s record-seeking developers didn’t stop there. The building boasts the most stories and highest occupied floor of any building in the world, and ranks as the world’s tallest structure, beating out a television mast in North Dakota.

“We weren’t sure how high we could go,” said Bill Baker, the building’s structural engineer, who is in Dubai for the inauguration. “It was kind of an exploration … A learning experience”

Baker, of Chicago-based architecture and engineering firm Skidmore, Owings & Merrill, said early designs for the Burj had it edging out the world’s previous record-holder, the Taipei 101, by about 33 feet (10 meters). The Taiwan tower rises 1,667 feet (508 meters).

Work on Burj Dubai began in 2004 and moved ahead rapidly. At times, new floors were being added almost every three days, reflecting Dubai’s raging push to reshape itself into a cosmopolitan urban giant packed with skyscrapers.

During the busiest construction periods, some 12,000 workers labored at the tower each day, according to Emaar. Low-wage migrant workers from the Indian subcontinent provided much of the muscle for the Burj and many of Dubai’s other building projects.

The tower is more than 50 stories higher than Chicago’s Willis Tower, the tallest building in the U.S. formerly known as the Sears Tower.

At their peak, some apartments in the Burj were selling for more than $1,900 per square foot, though they now can go for less than half that, said Heather Wipperman Amiji, chief executive of Dubai real estate consultancy Investment Boutique.

She said some buyers may struggle to find tenants at going rates once the tower’s expected high service charges are factored in.

“The investment community is quite divided,” she said. “They’re not sure how it’s going to play out.”

The Burj is the centerpiece of a 500-acre development that officials hope will become a new central residential and commercial district in this sprawling and often disconnected city. It is flanked by dozens of smaller but brand-new skyscrapers and the Middle East’s largest shopping mall.

That layout — as the core of a lower-rise skyline — lets the Burj stand out prominently against the horizon. It is visible across dozens of miles of rolling sand dunes outside Dubai. From the air, the spire appears as an almost solitary, slender needle reaching high into the sky. An observation deck on the 124th floor opens to the public Tuesday, with adult tickets starting at 100 dirhams, or just over $27 apiece. The ride to the top took just over a minute during a visit for journalists early Monday morning.

Dubai landmarks like the sail-shaped Burj al-Arab hotel and the manmade Palm Jumeirah island were visible through the haze. The Burj itself cast a sundial-like shadow over low-rise houses and empty sand-covered lots stretching toward the azure Persian Gulf waters. And yes, Dubai is still open for business: there are gift shops at the base and the top.

AP

“Mr. Al Dabal is accused of abusing his position and earning millions in illegal profit. We are questioning him almost daily and Mr. Al Dabal indicated he is ready to answer questions without having a lawyer present.”

The state-owned company is currently in merger talks with Emaar and analysts say this case clearly creates a distraction for the planned merge. Saud Masud, a Dubai-based analyst at UBS, said in a telephone interview that

“It also raises questions on the need for more due diligence beyond the financials for Emaar and it may end up becoming a catalyst for a management reshuffle.”

Mr. Al Dabal was arrested ten days ago, but as the investigation continues no arraignment date has been set. Attorney General al-Humaidan said

“We’re still trying to determine the extent of Al Dabal’s misconduct. When the investigation is complete, all details will be announced.”

Dubai’s economy could shrink between 2 and 4 percent in real terms this year, S&P said, as a collapse in oil prices and the global financial crisis take their toll on real estate prices and equities.

S&P said it had downgraded Emaar to BBB+ from A- with a negative outlook, taking the developer almost below investment grade, while it also slashed ratings of other companies, including DP World, by one notch each.

Four Dubai-based banks covered by the ratings agency were also placed on ratings watch, with negative implications, partly because S&P was concerned about the banks’ exposure to the emirate’s real estate sector.

Residential real estate prices in Dubai could slump almost 38 percent this year, a Reuters poll showed this week.

“The global economic downturn continues to depress some of Dubai’s key economic sectors, including trade, tourism, and commerce,”

S&P credit analyst Farouk Soussa said in one of three notes issued on Tuesday.

“We expect that as a result of these factors, the economy may contract in 2009.”

Emaar, one of the region’s biggest developers, was downgraded due to its heavy exposure to the weakening Dubai property market, S&P said.

“The weak markets are negatively affecting our view of Emaar’s business risk, and are likely to weaken Emaar’s currently healthy financial position in the near to medium term,”

said S&P credit analyst Alf Stenqvist.

Reuters

According to an Emaar spokeswoman, the petition was received in connection to the Emaar Investor Group requesting cancellation or postponement of three of the firm’s projects. The projects invovled are Warsan, Asmaran and Maysan, all thre launched in May and June last year.

“Emaar Properties has received a petition from investors regarding some of its projects and will consider their proposals seriously,”

she said in a statement.

Slowdown

Dubai’s property sector is suffering a sharp slowdown after a six-year building boom spurred by its move to allow foreign investors to buy properties and because of buoyant growth in Gulf economies during an oil price rally.

Dubai residential property prices have fallen by an average of 25 per cent since a peak of September, Morgan Stanley said last month, adding some US$263 billion (Dh965bn) of projects had been cancelled or put on hold in the UAE.

“Emaar is committed to upholding the interests of all our customers and stakeholders and appreciate their concerns, especially given the current economic conditions,”

the spokeswoman said.

Reuters

Analysts’ forecasts for Emaar’s fourth-quarter profit ranged from 1.33 billion dirhams to 2.10 billion dirhams in a Reuters survey in December. U.S.-related woes erased the company’s quarterly result after it wrote down 919 million dirhams of inventory and another 1.773 in goodwill in John Laing Homes, its U.S. subsidiary, in the fourth quarter.

“The (U.S.) economy is facing an unprecedented economic crisis,”

Emaar said in a statement.

The company said revenue for the fourth quarter fell to 3.495 billion dirhams from 5.142 billion dirhams a year ago while operating profit was 0.924 billion dirhams. The company’s aim would now be to complete the developments that it had started, not to begin new ones, Emaar said in a statement.

“Emaar is concentrating on completing all the projects, which have commenced construction and have put new projects/launches on hold to assist in reducing the real estate property supply in Dubai,” Emaar said.

“The new launches in 2009 will be dependent on the review of the demand and supply situation at various income segments.”

The firm posted profit attributable to shareholders of 3.06 billion dirhams in 2008 compared with 6.58 billion dirhams in 2007. Emaar recorded a loss per share of 0.29 dirhams in the fourth quarter compared to a profit per share of 0.29 dirhams in the same period last year. Emaar made 1.74 million dirhams in the fourth quarter of 2007 and 4.82 billion dirhams in the first nine months of 2008.

Reuters

“There has been a marked increase in the number of contractors asking for help to obtain payment, including payments certified months ago on some of Dubai’s largest projects,”

Michael Grose, a partner at legal firm Clyde & Co LLP, in the Middle East Projects and Construction Group, told Reuters.

“Whilst there is definitely an upswing in restructuring advice, no construction businesses are coming through the door wanting to put themselves into liquidation. Yet.”

As the global financial crisis began to hit the seaside emirate late in 2008, major government-linked developers behind some of Dubai’s high profile projects have put work on hold and cut jobs.

Projects worth $75bn suspended

Around $75 billion worth of projects in the United Arab Emirates have been suspended or cancelled altogether according to an HSBC report issued in January. “We have had to let go half of our staff and cut wages and it is not because we have no work, it is because we are not being paid for the work that we have completed,” a Dubai-based contractor told Reuters under the condition of anonymity.

“Contracts are not worth the paper they are written on. They don’t understand that the work gets done and you have to pay for it. There is a sense among the big developers that because they are linked to the government, they can do what they want.”

In response to a Reuters query, government-linked developer Emaar Properties, the largest listed Arab developer, said payments were based on a credit cycle and other conditions and that those that qualified would be paid.

“All payments that meet the criteria have been honoured and will continue to be honoured and will continue to be cleared, in line with contractual agreements,” a spokesman said.

Government-owned Meraas said in statement sent to Reuters that payments and payment schedules in the company are an internal matter and therefore details are confidential between the company and its contractors.

Overdue bills

One deputy chief executive with a consulting firm, who had a contract terminated by a major developer, said his firm was owed several million dirhams, now overdue, and did not know when he would be paid.

“Will the government bail the industry out? Well, has the government got the money?” he said.

Dubai — home to palm-shaped islands, an indoor ski slope and the world’s tallest building — has lured investors in droves over the past few years, but is now being hit hard by the global financial crisis.

Cranes that operated day and night before the crisis now stand motionless and many of the building sites are deserted as thousands of construction workers have been ordered to down their tools.

“Established developers or developers who have projects near completion will be in a better position than others (to make payments),”

said Abeer Gouda, senior financial analyst at Global Investment House in Kuwait.

“It will depend on the developer’s track record and the project itself, if it is near completion and on the location.”

State-owned Nakheel, developer of Dubai’s palm-tree shaped islands, said last month it would halt work on a 1-kilometre tall building for one year.

That decision followed the suspension of work on Trump Tower, a $789.5 million project on one the palm-shaped islands, in December. The developer cut 500 jobs in November.

Meraas in December said it would review its $95 billion Jumeirah Gardens project launched at a Dubai property exhibition.

“Payments have always been a problem here, but now the problem is a bit bigger. I reckon the Dubai government would honour their payments but you might have to wait longer than usual,” said the regional director of a construction group.

“Dubai cannot afford not to honour its debt to contractors.”

Reuters

“The longer term perspective is to have a euro medium term note (EMTN) programme ready so that once the markets open up we can use it,” Chief Financial Officer Amit Jain told Reuters on Tuesday.

“The total programme is $4 billion,” Jain said. “The idea is only to issue $2 billion,” he said, adding the company had opted for both Islamic and conventional notes so it would be easier to access liquidity when it becomes available.

The programme comes at a time when a global credit squeeze has virtually halted lending from international banks to regional banks as they ride out the turmoil spreading from U.S. financial markets.

Defaults on U.S. home loans and the ensuing credit squeeze have raised funding costs, prompting many Gulf Arab borrowers to delay bond sales as banks became more reluctant to lend.

Emaar sent a prospectus for a $2 billion EMTN programme by one of its units to the UK Listing Authority, the company said earlier on Tuesday in a regulatory statement. It also sent a prospectus for a $2 billion trust certificate program, a second regulatory statement said.

Jain said the programme would be used for future investment in assets such as shopping malls and hotels, but said it did not require immediate financing.

The notes would be listed on the London Stock Exchange, with HSBC and Royal Bank of Scotland acting as lead arrangers..

Emaar’s funding plans follow Islamic lender Dubai Bank and Commercial Bank of Dubai, which in September announced EMTN programmes worth $5 billion and $2 billion.

Reuters

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Emaar Malls Group, the developer of The Dubai Mall marks the opening with a series of high profile events, beginning with a public unveiling of the highly anticipated Dubai Aquarium & Discovery Centre at 4pm, today. The festive vibe will resonate throughout the mall with fashion shows taking place in the Fashion Catwalk, public skating at Dubai Ice Rink and high profile exhibits, galleries and performers providing entertainment for the entire family.

Besides its retail attractions including the Middle East debut of several global, high-profile brands such as Waitrose and Hamleys, The Dubai Mall has varied lifestyle and leisure offerings including a sprawling Gold Souk, the Olympic-sized Dubai Ice Rink and the multimedia-rich Fashion Catwalk atrium. The Dubai Aquarium & Discovery Centre is already in the global spotlight having clinched the Guinness World Record for the ‘World’s Largest Acrylic Panel.’

The Dubai Mall is centrally located in the Downtown Burj Dubai development – ‘the new heart of the city’ – just off Interchange One on Sheikh Zayed Road. Visitors can reach The Dubai Mall via multiple access roads from Sheikh Zayed Road, Financial Centre Road (previously called Doha Road), Emaar Boulevard, Downtown Burj Dubai, the newly opened bridge off Interchange One and through a direct access road near Emaar Square off Sheikh Zayed Road. The Dubai Mall will have a total of over 14,000 spaces for parking across three car parks, with valet services and a car locator ticketing system.

Sprawling over 12 million sq ft – equivalent in size to more than 50 soccer pitches – with an internal floor area of 5.9 million sq ft and a gross leasable area of 3.77 million sq ft, The Dubai Mall is the flagship development of Emaar Malls Group, the shopping malls subsidiary of global property developer Emaar Properties.

When fully operational, The Dubai Mall will have over 1,200 stores of which nearly 165 retailers – equaling 1.1 million sq ft, or 30% of the total gross leasable area of the mall – are either new to the region, or opening standalone or flagship stores for the very first time in Dubai. The retail mix includes two anchor department stores – Galeries Lafayette and Bloomingdale’s, both opening their first store in the Middle East at The Dubai Mall; 220 gold & jewellery outlets; 160 food & beverage outlets including Dubai’s largest food court with 40 outlets; a supermarket and an organic food mart.

Mr Mohamed Ali Alabbar, Chairman, Emaar Properties, said:

“The Dubai Mall is Dubai’s tribute to the world of retail and leisure. With the mall, we have set a strong platform for growth for the retail sector, one that reflects Dubai’s forward-looking model of creating robust business opportunities for enterprises from around the world. The Dubai Mall is, indeed, a confident affirmation of the strong economic fundamentals of the Dubai economy.”

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