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27 May 2024

Emaar sees no impact from US unit woes

By Reuters

Emaar Properties said yeterday it did not expect any further significant impact on its first-quarter results stemming from the bankruptcy of its US unit John Laing Homes (JLH).

"Emaar has already written down the complete goodwill related to JLH in fourth quarter, 2008 and also significant inventory value has been written down," it said in a statement on the Dubai Financial Market said. "As JLH enters into restructuring phase, there will not be further significant impact on first quarter of 2009 results."

The largest-listed Arab real estate developer has been forced to make impairments and writedowns of around Dh4 billion ($1.09bn) since it bought the US home builder for $1.05bn in June 2006.

John Laing Homes sought Chapter 11 bankruptcy protection on Thursday, citing a sharp decline in new home sales.

Emaar fully impaired Dh2.52bn of goodwill and has made writedowns of Dh1.54bn on unsold housing stock since it bought John Laing Homes.

The fall in Emaar's group revenues in the fourth quarter was "primarily due to slowing down of the real estate market in Dubai resulting from the current state of the global financial climate," the company had said.

Morgan Stanley said in a report earlier this month there was a risk that in full-year 2009 and 2010 Emaar would have to start writing down inventory in other markets, notably Dubai.

It said in another report that Dubai property prices had fallen by an average of 25 per cent since their peak in September.