• Developer has been `pleasantly surprised' by sales in Q1
  • Emaar hotels IPO unlikely this year, chairman Alabbar says

Emaar Properties PJSC implemented “severe cost cuts” as the developer of the world’s tallest tower responded to weakening Dubai housing market last year, its chairman said.

“We were really scared of 2016,” Mohamed Alabbar told reporters on the sidelines of a shareholders meeting in Dubai Monday evening. “We were pleasantly surprised” as first quarter sales were good, “but we are working so much harder than before. So much harder.”

Dubai’s biggest developer is dealing with one of the world’s most volatile housing markets, where falling oil prices, weaker currencies in Europe and Russia and an abundance of properties has hurt demand. Home prices are down 10 percent in the first quarter from a year earlier, while rents declined 5 percent, JLL said in a report published Monday.

“We are still cautious on 2016, 2017 but maybe we are too cautious, too careful,” Alabbar said. Property buyers from the five Persian Gulf nations still make up the bulk of Emaar’s customers in Dubai, while Indian buyers are still coming, he said.

Emaar, which earlier this week moved to separate from Indian partner MGF Developments Ltd. is in the early stages of the process, the chairman said. He declined to comment on the potential financial impact for Emaar.

“India is a huge market. It has its own opportunities. It has its many many challenges,” Alabbar said. “Is it easy to do business in India? I don’t think it’s easy to do business anywhere but we will have to move on and carry our own flag and put in our own operations, our own staff.”

Emaar, which had planned to sell shares in its hotels unit, is unlikely to do so this year as market conditions remain unfavorable. “We are not rushing,” Alabbar said.

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