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Istithmar to transfer properties to Nakheel

Dubai’s move will create global real estate group with US$52b of projects

(DUBAI) Istithmar PJSC, a Dubai government-owned private equity investor managing US$10 billion, will merge its real estate investments with Nakheel PJSC, another property company owned by its parent.

‘The nature of the real estate assets that we have will be well served by being on Nakheel’s balance sheet,’ Linley Davidson, an Istithmar director, said on Sunday. The combination is expected to be completed by the end of the year.

Since its founding in 2003, Istithmar has bought New York properties including 280 Park Avenue, 450 Lexington Avenue and the Knickerbocker Hotel at 6 Times Square. In November 2007, it bought London’s Adelphi building for US$567 million as part of a plan to capitalise on surging demand for hotel rooms and office space in major Western cities.

Nakheel PJSC has US$30 billion of projects underway in Dubai, including three palm tree-shaped islands, a cluster of islands in the shape of a world map and the Dubai Waterfront development, that aims to extend the emirate’s coastline by 820 kilometres.

Istithmar and Nakheel are owned by Dubai World, a diversified group operating a range of businesses including DP World Ltd.

The merger of the Nakheel and Istithmar real estate units will create a global real estate company with US$52 billion of projects, the Middle East Economic Digest reported. The merger will give Nakheel assets in countries including the UK, the US, South Africa and Singapore, and help its overseas expansion, the London-based weekly magazine said, citing an unidentified Nakheel official.

 

Source: Bloomberg (Business Times 27 Nov 07)

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