Debt-laden Nakheel takes big first half loss

Debt-laden Nakheel takes big first half loss

Real estate giant Nakheel, at the centre of the Dubai debt crisis, reported a 13.4 billion dirhams (3.64 billion dollar) loss Wednesday for the first half of 2009 after a large writedown of asset values.
The developer, whose 3.5 billion dollar Islamic bond debt sparked parent Dubai World's move to ask lenders for a temporary payment suspension, said revenues had plunged 78.1 percent in the six months to June 30 to 1.97 billion dirhams (537 million dollars) from 9.0 billion dirhams (2.45 billion dollars) a year earlier.
The developer of the Gulf emirate's extravagant palm-shaped islands took 12.2 billion dirhams in "impairment losses" stemming from a writedown of land values as the property market in Dubai has plunged in the past year.
Also included are projects the company said would be delayed or scaled down.
"The management no longer considers these project costs to be fully recoverable," it said in the six month report.
Nakheel is part of the government-controlled Dubai World group, which late last month shocked global financial markets by asking for a six-month delay in repayments on Nakheel's sukuk bond which matures on December 14.
Dubai's government has said it will not guarantee the debts of Nakheel or Dubai World, which has a total debt estimated at 59 billion dollars.

 

America's most expensive places to live

In the midst of the recession, New Yorkers are cutting back on everything from dining to luxury shopping. Café des Artistes, one of the Big Apple's most storied restaurants, closed in August, in part because of poor business. Chanterelle followed this month. In July, J.C. Penney opened its first Manhattan location, citing local demand for discount merchandise.

These changes make sense. New York tops a recent list of America's most expensive cities, with a measured cost of living surpassing that of Houston, Boston and Washington, D.C. The culprit? High rent: $4,300 a month on average for a two-bedroom, unfurnished luxury apartment. The silver lining: That's down $200 from when the survey was taken in 2008.

Behind the numbers
To determine the U.S. cities where the cost of living is highest, the London office of Mercer, an American human resources consulting company, earlier this year measured the prices of the same basket of goods in 253 of the world's cities. The basket is composed of more than 200 products, representative of executive spending patterns and including everything from rent for a luxury apartment to the cost of a fast-food hamburger. Mercer chose a sampling of U.S. cities to measure — the 10 most expensive of which are listed here.

Location has a lot to do with why New York and Los Angeles top the list.

Before the 1970s, New Yorkers were — in a sense — paid a premium to live in the Big Apple, due to its reputation for crime and filth. But when the city began to experience robust economic growth, demand outweighed supply, and housing prices grew. Though prices are now dropping, and are largely believed to have yet to hit bottom, the area's cost of living, according to Mercer, remains the nation's highest. Its housing cost, according to Mercer, is almost double that of second-place Los Angeles.

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The City of Angels, like New York, attracts go-getters, as well as those looking to live in the city's warm, Mediterranean climate. The recent housing boom lured scores of would-be homeowners who are now facing underwater mortgages and high unemployment, as well as footing bills that come with the nation's second-priciest city.