Plans by Emaar Properties to build a long-delayed US$600 million (Dh2.2 billion) waterfront resort in Indonesia are back on track with a proposal now submitted to Bali's tourism authority. The Gulf's largest property developer began talks with the Indonesian government in 2007 to develop the Mandalika project across a 7km stretch of seafront on Lombok Island as part of a joint venture with Pengembangan Pariwisata Bali (Persero), an Indonesian government-backed company.
But progress has been slowed by disagreements over the share of equity in the project, and by land acquisition problems. Representatives of Emaar and Persero met last month for discussions that were intended to resolve the outstanding issues. Emaar said yesterday that it had "submitted an expression of interest to the Bali Tourism Development Corporation (BTDC) in accordance with the tendering procedure recently launched by the government of Indonesia for the Mandalika development in Lombok".
The development, set to include residential villas, hotels, shopping facilities and golf courses, is seen as vital to boosting Lombok's appeal to international tourists and challenging Bali as a high-profile resort destination. Emaar pulled out of a $20bn development in Algeria last year because of the economic downturn, but would "continue to seek growth opportunities in sustainable global markets", the company said.
The collapse of property prices in Dubai, where Emaar is based, has led the firm to focus on projects elsewhere in the Middle East and Asia. Its Indian unit, Emaar MGF, has been given approval by the country's stock market regulator, the Securities and Exchange Board of India, for a $770m initial public offering (IPO). Emaar MGF had originally hoped to raise more than $1.6bn through a sale of shares in February last year, but abandoned the plan because of tumbling global stock markets.
The revived IPO, which Emaar MGF has one year to complete, has been spurred by increased appetite among investors. The additional capital will help complete 29 projects that Emaar MGF has under development in India, where its land reserves total about 4,600 hectares. Emaar is now counting on its overseas ventures to boost revenues. The completion of the Marassi beach clubhouse, a component of its Marassi development in Egypt, helped to swing the company back into profit in the third quarter of last year, after three quarterly losses.
Revenues from the firm's other foreign investments will also start to come through this year, with delivery of projects in India, Egypt and Saudi Arabia, said Majed Azzam, a property analyst at Al Futtaim HC Securities. "We're also going to see stronger results from international ventures, as they will deliver them more aggressively," he said. @Email:firstname.lastname@example.org