Syria: Property projects aborted or delayed

Syria Sanctions: UAE property companies moved into Syria expecting rapid growth, but now they are facing long delays.

Syrian workers construct a building in Damascus. The price of property in Syria has sky-rocketed in Syria, where an apartment can be sold for three million USD, an inaccessbile dream for most Syrians. AFP PHOTO/ LOUAI BESHARA
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Syria was viewed as a hot market for regional property and construction companies before the turmoil.

Syria:

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Several companies from other Arab nations launched operations in the country, especially from UAE and Qatar, as the Syrian government moved to relax restrictions on foreign investments.

But most of the projects were delayed or shut down after violence broke out in the streets. The new sanctions are unlikely to have an immediate impact, analysts say.

"The markets are already discounting" the impact of the unrest on property companies, said Ankur Khetawat, analyst with AlembicHC.

The biggest project in Syria with ties to the UAE is the Dh1.8 billion (US$490 million) Eighth Gate in Yafour, near Damascus. Emaar, a Dubai developer, handed over the first phase of the project in the first half of the year, including 315 office units. Emaar declined to comment on the status of the project.

Other UAE companies with development interests in Syria include Arabtec, the UAE's largest construction company, which is helping to build Eighth Gate. Arabtec also has a contract to build the $120m Yasmeen Rotana Hotel in Mazzeh.

Drake & Scull International (DSI) opened an office in Syria last year and announced its first deal, a Dh85m contract to fit out the Rotana Gardenia Hotel in Homs, just weeks before violence broke out.

The project was in its early stages and DSI pulled out its employees months ago, as the conflict escalated in Homs. "We don't have any financial liability," said Zeina Tabari, DSI's chief corporate affairs officer.

Depa, a Dubai interior contractor, also went into Syria last year and lists two projects in its backlog - a Dh68.4m contract for the Yasmeen Rotana and a Dh67.3m deal for the Gardenia Rotana.

Belhasa, a Dubai conglomerate, had joined a Syrian company, Palmyra Real Estate, which was developing a residential project. But Belhasa sold its stake last year to an Egyptian company.

Qatari Diar, a developer backed by the Qatar government, halted work this year on the $350m Ibn Hani Bay Resort in Latakia, in addition to projects in Damascus. Syria was also a key market for Lebanon's construction industry.