Darvesh shelves plans to invest $6bn in 40 branded projects

Darvesh Group, a Dubai-based diversified company, has shelved its plans to invest $6 billion (Dh22bn) to construct 40 branded projects across different cities in the next five years.

"We have put on hold our plans to enter the real estate market as the sector has seen a worldwide decline. Besides, banks are also not interested in funding projects. So we are investing in technologies and stable cash flow industries," Ahsan Hassan Darvesh, Managing Director, Darvesh Group, told Emirates Business.

In February 2008, the company announced the launch of Le Diamond, a property concept that it said will span the Middle East and India, in partnership with Ivana Trump.

"We plan to have four different branded developments and Ivana Trump is the first brand that we have signed up. Under each brand, we'll develop 10 properties in different cities," Darvesh then said.

In Dubai, the company was planning a Dh1.5bn mixed-use twin tower on Dubai Waterfront.

"We don't foresee us entering the market for the next three years. Though we did not proceed with the construction of the project, we did lose some money in branding and designing," Darvesh said.

Property prices in Dubai have been falling with Colliers International reporting a decline of 41 per cent during the first quarter of 2009 compared to the same period last year. In December 2008, Nakheel stopped work on Trump Tower, a $789.5 million project on The Palm Jumeirah.

According to real estate experts, the correction in Dubai's real estate market has forced companies to rethink their strategies, and especially start-ups.

"We have already seen how companies have postponed their aggressive plans of expansion and are shelving new project launches. Companies that wanted to go global with big brand names attached to them have found it a bit too difficult to sell luxury in the downturn," an analyst said on condition of anonymity.

Darvesh Group, a company set up in 1909, has offices across the Middle East, China, New York, Hong Kong, Singapore, Nigeria, Ivory Coast, Panama and Myanmar. The company has announced plans to build a Dh3bn aluminium processing plant in the UAE.

 

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.