China builder buys stake in SKAI's $1 billion Palm Jumeirah project

The Middle East subsidiary of China State Construction Engineering Corporation (CSCEC), one of the world’s largest construction companies, is investing in Dubai-based SKAI Holdings’ Dh3.67 billion Viceroy Dubai Palm Jumeirah project.

The Chinese company has bought an equity stake in the project, Kabir Mulchandani, Chief Executive Officer, SKAI Holdings, told Emirates 24|7, declining to give financial details of the deal.

“We have already registered sales of Dh2.1 billion. Work has commenced on the project and will be completed by 2016,” he added.

The announcement is the first major investment by a Chinese company in Dubai’s property market. Chinese bought properties worth nearly Dh550 million in 2010.

CSCEC is the main contractor of the Viceroy Dubai Palm Jumeirah. It has formed a special purpose vehicle, ASSAS, together with SKAI Holdings.

“This is CSCEC’s first investment in a development project in the Middle East and marks a significant milestone in our growth in the region,” said Yu Tao, President and CEO of China State Construction Engineering Corporation (Middle East) in a statement.

CSCEC, which has been operating in the region since 2003, is China’s largest construction, building work contractor and real estate company.

In 2012, CSCEC’s annual total value of contracts signed stood at Dh631.7 billion while turnover reached Dh341.6 billion.

Viceroy Dubai Palm Jumeirah will have 481 large rooms and suites and 221 signature Viceroy Residences. The hotel will have a beach club and a 100-metre long pool and children’s clubs, entertainment and sporting activities.

Nearly 3,800 Chinese companies are based in the UAE with China’s annual investment in the UAE being $170 million by October 2012.

The UAE is China’s largest export market in the Gulf with bilateral trade between the two countries increasing 16 times since 2002 to reach $40.42 billion in 2012.

Trade between the two countries has risen from mere $50 million to $35 billion over the past three decades, with a large number of Chinese companies operating specifically within the logistics, aviation and energy sectors.