Dubai's Emaar hit by US housing slump

July 29, 2008
Dubai's Emaar hit by US housing slump
'Development properties' forces S$61m writedown

(DUBAI) Emaar Properties PJSC, the Middle East's largest real-estate
developer, wrote down 165 million dirhams (S$61 million) related to
its US unit in the second quarter, Al Mal Capital PSC said, citing an
analyst call.

The company's gross profit included a writedown related to
its 'development properties' at John Laing Homes, while goodwill was
unaffected, Al Mal said over the weekend.

Any writedown of goodwill in the second half will be offset by
increased profitability, the Dubai-based investment bank cited Emaar
as saying.

Emaar bought Newport Beach, California-based John Laing in 2006 for
US$1.05 billion, about a year after a five-year US housing boom
peaked.

The nation is now in its worst housing slump since the Great
Depression.

Emaar had goodwill of 2.5 billion dirhams for its US operations at
the end of last year.

One third of this amount may be written down this year, Stefan
Schurman, analyst at EFG-Hermes Holdings SAE, Egypt's largest
investment bank, said in a note issued earlier this month.

The Dubai-based company expanded its land bank in Turkey by
approximately 73,500 square metres in the second quarter, at a cost
of 400 million dirhams, Al Mal said.

Emaar sold 73 per cent of the international units released in the
second quarter, Al Mal said.

Emaar is building the Burj Dubai, the world's tallest tower, and
plans to construct six hotels, a theme park as well as 1,200
apartments as part of the Las Vegas-style Bawadi project in the
desert outside Dubai.

The company, in which the Dubai government is the largest
shareholder, is expanding into countries including India and Egypt to
become less dependent on its home market.

The developer's second-quarter profit rose 6.4 per cent as costs fell
and revenue stayed almost unchanged.