Al Shaikh resigns from Deyaar Chairman's post

Dubai-based real estate developer Deyaar Development said yesterday its Chairman Nasser Al Shaikh has submitted his resignation to the board of directors, with analysts expecting the news to have a negative impact on the company's share price in the short term.

"The company's board will meet shortly to consider its ratification," Deyaar said in an e-mailed statement to the Dubai bourse.

Last month, Al Shaikh was moved from his post as the director of Dubai's Department of Finance.

He is also the Assistant Director for External Affairs at the Diwan of the Ruler of Dubai. Abdul Rahman Saleh Mohammed Al Saleh replaced him at the helm of the Finance Department.

Al Shaikh and Chief Executive Officer Markus Giebel could not be reached for comment. However, sources said Al Shaikh still holds the position of chairman in Amlak Finance, which is undergoing a restructuring by the federal government.

According to industry analysts, Deyaar "may face a period of uncertainty" for a short time until a new chairman is elected and this would have an impact on share prices. But they said the company has been on the forefront of launching innovative schemes for investors and addressing various concerns, such as refund of investors' money or consolidation.

"Deyaar has been a very proactive developer and introduced innovative schemes to address investors' concerns. Although Al Shaikh's resignation may impact the share prices to some extent, we have to wait and see what strategy the company adopts in future," said Bobby Sarkar, Vice-President Equity Research at Al Mal Capital.

In a recent report, Nomura International said: "Deyaar is still in a state of transformation, the old guard has been replaced by the new guard, making key strategic decisions to help the company weather the current storm. The emotional attachment to legacy developments has gone and management appears to have taken a suitably pragmatic and proactive approach to asset management, development and portfolio consolidation, price points and end-user financing."

The UK-based subsidiary of Japan's Nomura Holding maintains a "sell" rating on the scrip.

Al Shaikh was quoted in the Deyaar annual report as saying: "Over the past few years, we have experienced a consistent double-digit growth in profits. Over the past four years alone, the company's profits have grown seven times with our equity now standing at Dh7.302 billion.

"The global climate of financial uncertainty notwithstanding, we are preparing ourselves for an exciting future full of new possibilities, global expansion and new community developments, which will see more people from diverse backgrounds coming together. The year 2009 will see new projects announced in the UAE and abroad in the Middle East and South East Asia."

Last week, Giebel told this newspaper that the company had cancelled the Enclave project after returning 100 per cent of investors' money. Enclave, consisting of nine residential buildings, was to be built in the International Media Production Zone.

He also said the company was going to release a large-scale development in the Dubai market, which will lead to a "tremendous" increase in rental income. "We haven't sold a single unit… it is marked as an income-producing asset. It will increase our income tremendously even if rents in some areas may have come down," he added.

Although the developer has shelved plans to enter Saudi Arabia's real estate market, it is scouting for other global opportunities.

Deyaar is to deliver four million square feet, or 25 per cent of its projects, this year, 25 per cent in 2010 and 2011, and consolidate another 25 per cent of its projects with the rest of its portfolio. A further 25 per cent of its projects are unannounced and unsold. The company's shares fell 6.91 per cent yesterday to close at Dh0.81 on the Dubai Financial Market. The stock fell about 83 per cent in 2008.

Earlier, Union Properties' CEO Simon Azzam had resigned last week.

Prior to him, Tameer CEO Ghassan Sakhnini resigned from his post, while citing personal reasons.

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