Emaar and Aldar property alliance underscores new economic landscape following oil rout

The Emaar Properties logo in Downtown Dubai. It is collaborating with Aldar on projects for the first time. (WAM)
Updated 22 March 2018
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Emaar and Aldar property alliance underscores new economic landscape following oil rout

LONDON: The decision by Abu Dhabi’s Aldar and Dubai’s Emaar to forge a strategic alliance has attracted widespread attention in the Gulf.
The pair have plowed lone furrows in the past but are now teaming up in a move that analysts see as a sign of closer commercial ties between the UAE’s two biggest emirates.
It comes as UAE property developers are under increased pressure amid a weak housing market, faltering consumer confidence and expatriate job losses.
“We are in a new economic reality, one that commenced four years ago with the oil rout. I think the best thing for UAE going forward is to consolidate entities, play off each other’s strengths and present a more unified front to the rest of the world,” said Faisal Durrani, who heads research for Cluttons, the property broker.
The deal between the two property companies is for co-operation and pooled resources in selected areas.
But collaboration has the benefit of making a bigger land bank available for exploitation, and potentially, fatter margins. “We are happy to witness the signing of this partnership, which will contribute to our development journey and help enhance the UAE’s position as a tourism destination of choice,” said Mohammed bin Rashid Al-Maktoum, prime minister of the UAE, and ruler of Dubai.
“We want our companies to collaborate to explore creative ideas for strengthening the UAE’s leadership,” he added.
The developers will initially collaborate on two UAE-based projects: Saadiyat Grove in the heart of the cultural district on Abu Dhabi’s Saadiyat Island, and the Emaar Beachfront project, a private island in Dubai located between Jumeirah Beach Residence and Palm Jumeirah.
Emaar and Aldar are both profitable, even though in many segments, the Gulf trading environment is not as lucrative it was — especially in the real estate sector.
So is it possible that economic realities have helped to propel the latest deal? “That could be one key, underlying factor,” said Durrani.
The tie-up between the two big property players in both emirates follows similar collaboration in the aviation sector.
Last October Dubai-based Emirates and Abu Dhabi-based Etihad revealed plans to cooperate in areas that included procurement.
Beyond the business arena, there are also signs of a more joined-up approach in sport, with the Abu Dhabi and Dubai cycle tours scrapped in favor of a single UAE race from 2019.
“That appears to be part of a wider government move to help position the UAE on the global stage,” said Durrani.
Emaar has an excellent track record in developing real estate projects, in multiple asset classes and can produce sparkling numbers even when the economy hits a soft patch.
Equally, Aldar — which operates in the more challenging Abu Dhabi property market, has good experience to pass on in the area of beach front developments.
But the biggest benefit could be the enhanced reputation that would accompany an Emaar-Aldar alliance.
More than that, if we accept that two is better than one, heralding greater profitability, investors may stand to benefit further down the line.


British PM May: 'I will not break up my country for EU Brexit deal'

Updated 21 September 2018
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British PM May: 'I will not break up my country for EU Brexit deal'

  • Theresa May hits back with angry statement after EU leaders rejected May’s Chequers plan
  • Sterling plummets as both sides warn they are planning for a no-deal scenario

LONDON: British Prime Minister Theresa May said on Friday Brexit talks with the European Union had hit an impasse, defiantly challenging the bloc to come up with their own plans a day after the bloc’s leaders savaged her proposals.
At a summit in Austria on Thursday, EU leaders rejected May’s “Chequers” plan, saying she needed to give ground on trade and customs arrangements for the UK border with Ireland.
The British media said the response had left her proposals in tatters, and May angrily struck back in a televised address from her Downing Street office, saying neither side should expect the impossible from the other.
“Throughout this process, I have treated the EU with nothing but respect,” May said. “The UK expects the same. A good relationship at the end of this process depends on it.”
Sterling extended its losses as May spoke, falling to as low as $1.3080, about 1.4 percent on the day, putting it on course for its biggest one-day drop this year, over growing fears Britain could leave the EU without any deal.
May has said the Chequers proposals for trade with the EU, which would resolve arguments over the border of Northern Ireland with the Irish Republic, were the only way forward. EU leaders in Salzburg repeated their view that the plans would undermine their cherished single market.
After the summit, EU leaders said they would push for an agreement next month, but both sides have warned they are planning for a no-deal scenario.
“It’s not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals,” May said. “So we now need to hear from the EU what the real issues are, what their alternative is, so that we can discuss them. Until we do, we cannot make progress.”
May, who commands a majority in parliament only with the support of a small pro-Brexit Northern Irish party, said she could not agree to any deal which treated Northern Ireland differently to the rest of the United Kingdom.
The EU insists that there can be no hard border between the British province and the Irish Republic, with Northern Ireland remaining in the bloc’s customs union or effectively establishing a border in the Irish Sea if no alternative deal is reached.
“I will not overturn the result of the referendum nor will I break up my country,” she said. “We need serious engagement on resolving the two main problems in the negotiations and we stand ready.”
However, she said no matter what happened, the rights of three million EU citizens living in the United Kingdom would be protected.
Earlier, her Brexit Secretary Dominic Raab said some EU leaders had shown unstatesmanlike behavior in Salzburg.
“We’ve already compromised hugely with the Chequers proposals,” Raab told BBC TV. “What we’re not going to do is be salami sliced throughout this negotiation in a typical style that the EU engages in without movement on the other side.”
For the British media, the message from Salzburg had been clear. “Your Brexit’s broken,” the Daily Mirror newspaper said.
Newspapers led their front pages with a Reuters picture showing May, dressed in a red jacket, standing apparently aloof and alone from a mass of suited male EU leaders.
May faces a fight with angry Conservative lawmakers at her party’s annual conference from Sept. 30.
Many have voiced opposition to her plans, which they said would bind Britain into much EU regulation in return for free trade, and some would prefer a no-deal “hard Brexit” in March, despite warnings that would ravage the British economy.
“Theresa May’s Brexit negotiating strategy has been a disaster,” opposition Labour leader Jeremy Corbyn said. “The Tories have spent more time arguing among themselves than negotiating with the EU.
“The political games from both the EU and our government need to end because no deal is not an option.”
In response to May’s statement, the Confederation of British Industry and other business bodies said they wanted to see constructive dialogue, not rhetoric.
Last week, London Mayor Sadiq Khan added his voice to those including union and business leaders who said there should be a second Brexit referendum. Scotland’s top court ruled on Friday that the European Court of Justice should consider whether Britain could unilaterally change its mind on Brexit.
“The referendum was the largest democratic exercise this country has ever undergone,” said May, who has repeatedly ruled out a second vote following the original 2016 referendum. “To deny its legitimacy or frustrate its result threatens public trust in our democracy.”