Deconstruction in Dubai

It's a common fact, much like anywhere in the world, property development has tanked over the last 12 months. And Dubai, so focused on this industry has been hit extremely hard. The FT reports today of some real examples of scaling back, or companies and individuals not being paid, quite simply because the money has run out. And that's not just a Dubai thing, that's a world problem. Liquidity, or more appropriately illiquidity and lack of financing. No one is prepared to underwrite or can underwrite the future projects at this stage. What does this do for the physical landscale - well, depending on start dates, those who didnt see this coming will leave their half finished buildings in mid state, unable to complete. What about those who presold - well that's a big worry for investors.

A year ago the worries were somewhat different - Dubai construction companies were worried about the cost of materials increasing during the timeframe of their poject, and hence the speed in bringing buildings to market.

Now construction is all about either being paid or getting money to get paid. That's what I call deconstruction.

Dubai contractors face cash flow crisis