Dubai: Political unrest in Syria, Egypt and Bahrain affected business for developer Majid Al-Futtaim (MAF) in 2011, but positive results in Dubai helped soften the blow, the firm's chief executive said yesterday.
MAF's hotels in Bahrain suffered low occupancy rates in 2011, leading to a Dh300 million writedown, while assets in Egypt, where MAF is in the process of building a mall in Cairo, lost Dh250 million.
But chief executive officer Iyad Malas stressed that despite the writedowns, overall asset value increased on the strength of its Dubai malls including Mall of the Emirates and Deira City Centre.
"We saw lower than expected occupancy rates in our two hotels in Bahrain, and decided to write the value of these assets down," Malas said at a press conference at which the firm's 2011 audited results in Dubai were revealed.
"All in all, the valuation of assets is higher than in previous years," he said.
Funding
Commenting on MAF's $500 million (Dh1.83 billion) Mall of Egypt project, which was delayed due to the revolution which ousted President Hosni Mubarak in February 2011, Malas said that the company was in the advanced stages of discussions with Egyptian banks regarding the funding.
"We had planned to start work on it last year, [but] we postponed that decision for a number of reasons, not only because of the Arab Spring. We are still waiting for some permits and we hope to start construction later this year," he said.
"We have talked to Egyptian banks [about funding] and we have advanced discussions with two consortiums," Malas added, stressing that the firm would look to borrow in Egyptian pounds and not in US dollars.
MAF also has a project in Syria, close to the Lebanese border, which has been stopped due to the unrest in that country.
"It is on hold. We have done some work on design but we have not started construction," Malas said.
