7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Debt-ridden Dubai opens Burj Khalifa

DUBAI: Dubai opened the world's tallest structure in a ceremony meant to put a brave face on crushing debt woes. The $1.5 billion tower reaches 828 metres, 200 storeys into the sky, exceeding the next highest inhabited building, Taiwan's Taipei 101, by more than 300m.

Dubai's ruler Shaikh Mohammed bin Rashid Al Maktoum renamed the tower Burj Khalifa after the president of the UAE and the ruler of Abu Dhabi, Shaikh Khalifa bin Zayed Al Nahayan.

Abu Dhabi has facilitated $25bn in bailout funds for Dubai in the past year. Concerns about Dubai's $100bn debt pile overshadowed both the ceremony and boasts by the builder, Emaar Properties, that the Burj heralds a new dawn.

Emaar says property prices have now stabilised, confounding wider expectations for stress in the sector.

"You have to ask, 'why we are building all this?' To bring quality of life and a smile to people and I think we should continue to do that," said Mohamed Alabbar, chairman of Emaar, the Arab world's largest listed developer.

"Crises come and go," Alabbar said.

"We build for years to come ... We must have hope and optimism."

But investors took little heart with Emaar shares closing down 3.4 per cent, pulling Dubai's broader index 2.6pc lower.

In a sign Dubai is trying to meet its obligations, DP World , a subsidiary of state-owned holding company Dubai World, said yesterday it had paid obligations tied to a sukuk and a bond issue on time.

Dubai sent shockwaves through global markets on November 25 when it said it would request a standstill on billions of dollars of debts linked to the state-held holding firm Dubai World and its property units Limitless and Nakheel, developer of three palm-shaped islands.

Dubai World is expected to pitch a formal standstill proposal on its debt payments to creditors this month, while it comes up with a restructuring plan.

The conglomerate has already moved to ringfence its profitable assets, and said its debt restructuring excludes firms on a "stable financial footing" such as DP World, Istithmar World, and Jebel Ali Freezone.

The tower's opening has been delayed twice and, unlike other projects, survived cancellations after the crisis hit the one-booming city.

Experts say land scarcity or urban density does not justify the height of the building, rather its "iconic" appeal is a symbol of Dubai's ambitions.

From the 124th floor observation deck of the tower, viewers can see 80km on a clear day.

The air is noticeably cooler and fresher on the terraces compared to the stifling heat and humidity at ground level during Dubai's summer.

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