Given the current slowdown in the construction sector in Dubai, he said: “LCL does not want to miss out on the opportunities in Abu Dhabi’s bustling construction sector.”
“LCL will aggressively bid for IFO projects in Abu Dhabi particularly in government-funded projects such as hospitals, universities and clinics,” Low told a group of Malaysian journalists visiting LCL’s existing projects in Dubai and potential projects in Abu Dhabi as well as some top Malaysian government officials based in the United Arab Emirates (UAE).
The group will also be looking at setting up strategic partnerships with Malaysian construction and property companies as well as Middle Eastern groups with investments in UAE and other countries in the Gulf region.
Unlike the tight liquidity situation in Dubai following the global economic downturn, Abu Dhabi is actively forging ahead with mega projects such as commercial and residential buildings, roads, airport and rail systems estimated to be worth a whopping US$208bil.
The top 10 construction projects in Abu Dhabi include the US$40bil Khalifa City, which is similar to Malaysia’s Putrajaya, the US$39bil Yas Island tourist development, Burooj Properties’ US$24bil real estate community project and Saadiyat Island’s offshore development worth US$28bil.
There is also the US$22bil Masdar City, the world’s first zero-carbon, zero-waste city, the US$18.5bil mixed hospitality development Al-Raha Beach Complex, the US$7.5bil Al Reem Island mixed development and US$3bil Abu Dhabi Light Rail Project and a MGM Grand Hotel.
On the status of LCL’s IFO projects in Dubai, Low said: “We hope to complete most of our existing projects before year-end and are also in the process of recovering our claims and entitlements from property developers in Dubai estimated at not less than RM200mil.
“We have a strong case to make these claims and expect these claims to materialise in the next eight to 10 months. This will lead to a substantial reduction in our high borrowings currently.”
LCL has seen three consecutive quarters of losses.
For the second quarter ended June 30, it posted a net loss of RM18.1mil on revenue of RM105.6mil.
Low believes LCL will be looking at a better second half and hopefully a stronger fourth quarter to stay in the black this fiscal year.
Although LCL is consolidating its business in Dubai, he is confident that recovery in the emirate’s construction sector will likely take place next year.
According to the latest data by Dubai-based Real Estate Regulatory Agency, almost three-quarter of property development in Dubai have made construction progress despite the slowdown.
Of 552 projects, more than 72% showed some construction progress, while 17% were “stalled” and 11% “delayed.”
Jones Lang LaSalle, the world’s leading real estate investment and advisory firm, late last month said Dubai and Abu Dhabi were among the best positioned to attract long-term investment to their real estate markets over the next two to three years, noting that Dubai had made “considerable progress” towards recovery since last year.
The positive views on Dubai and Abu Dhabi are shared by Malaysian Ambassador to UAE Datuk Yahaya Abdul Jabar, Dubai-based Matrade senior trade commissioner Dzulkifli Mahmud and Export-Import Bank of Malaysia Bhd (Exim Bank) managing director Mohd Fauzi Rahmat.
Dzulkifli said UAE was Malaysia’s largest export market in the Middle East with exports worth RM12.4bil posted in 2009 from RM2.93bil in 2008.
Malaysia’s major exports to UAE include jewellery, electronic and electrical products and palm oil.
“Malaysian companies are well regarded in Dubai as having good reputation in terms of their on-track delivery and good quality products,” he said.
Fauzi said Exim Bank had been assisting Malaysian companies seeking facilities to undertake investments in the Middle East and African countries.
“To date, 10% of Exim Bank’s business is in the Middle East. So far, the bank has approved some RM365mil facility for this market,” he said.
Yahaya commended LCL’s performance in Dubai amid the tight credit situation there.
He said the company had set the benchmark for Malaysian companies operating in Dubai.
By The Star (by Hanim Adnan)
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