Dubai World Could Sell Assets to Balance Books

DUBAI, UAE-Speculation has been in the air for weeks that Dubai World many need to sell some of its prime real estate assets in order to pay down the $26 billion of debt it holds from Nakheel, the company’s real estate arm. And now, according to reports, a top government official has confirmed an asset sale could be waiting in the wings.

“There is confusion in the media that the government plans to sell assets. The company has foreign investments and real estate investments abroad. There is nothing to prevent selling these assets,” Abdulrahman Al Saleh, director general of Dubai’s Department of Finance said Monday in an Al Jazeera television interview. “The main goal of the restructuring of Dubai World is to guarantee its continuation in a new framework.”

Dubai World is a government-owned entity that has been buying up prime real estate assets across the world, as well as investing in huge development projects.

At the end of November, Dubai World asked all its creditors to extend maturities for at least six months, until May 30, 2010. The request effectively asked for a standstill in repayment of its mounting debt.As GlobeSt.com reported, Dubai World was looking to sell non-core assets in New York City. Such potential sales include the Jumeirah Essex House, the Knickerbocker Hotel in Times Square and Barney’s.

In January, Dubai World hit the pause button on the construction of what would have been the world’s tallest skyscraper. As GlobeSt.com reported at the time, development would take a year-long hiatus according to a statement by developer Nakheel. The decision came on the heels of a report saying that home values in the United Arab Emirates had dropped 8% over the last three months year-over-year.