Global holding company Dubai World today announced that it has largely completed its organisational restructuring. This has resulted in significant cost savings and increased efficiency. Its businesses are now well prepared to thrive in both the current climate and the still uncertain future environment.
The reorganisation builds on the changes announced in June, when management of Jumeirah Golf Estates, Jumeirah Lakes Towers and the real estate activities of Dubai Maritime City moved to Dubai World real estate company Nakheel.
As a result of the overall reorganisation, the company is scheduled to benefit by more than US$800 million dollars in operating savings over the next three years. The total workforce managed by Dubai World companies globally has been reduced by approximately 15% to less than 70,000 . However, the reduction is around 25% in the UAE, largely as a result of the downturn in the real estate market in the region. Each Dubai World division is now more appropriately sized for the current market while at the same time well placed to take advantage of the eventual economic recovery.
During the process, each division reviewed its business plans and developed a clear strategy in line with its specific area of expertise, and reviewed their operations and costs to better reflect the current environment.
Importantly, the ownership of the key assets underpinning Dubai World’s balance sheet remains unaffected by the organisational restructuring.
Dubai World Chairman Sultan Ahmed Bin Sulayem said:
“Whilst the challenges we faced are not unique, with no global entity immune from the pressures of the world wide recession, we are confident that Dubai World and its subsidiaries are appropriately focused and properly structured to embrace the new global reality.
“Our diverse portfolio of assets around the world, together with our significant interests here in Dubai, provides us with an exciting and compelling future. With the reorganisation, the Group enters this next vital phase of our evolution better able to withstand all economic eventualities. Dubai World remains a testament to the vision of our government and the UAE as a whole, today and tomorrow.”
Group Chief Executive Officer of Dubai World Jamal Majid Bin Thaniah said:
“This organisational restructuring is a substantial achievement and I would like to thank all our employees and our customers for their continued loyalty through these difficult times.”
Some of the key highlights of the restructuring are detailed below.
Nakheel, the real estate development arm of Dubai World, has reorganized to focus its activities on that core business. The company is now structured into two divisions – asset management and real estate development.
As noted above, Nakheel is now responsible for management of some real estate assets previously managed elsewhere in the group.
As previously announced, the management of several hotels and commercial property has been transferred from Nakheel to Istithmar World. Istithmar World will continue to own these assets.
In addition, management of Nakheel’s shopping malls, including Ibn Batutta Mall and DragonMart in Dubai, are moving to a separate entity branded Retailcorp World (see below). These changes are consistent with Nakheel’s positioning as a real estate development business.
Nakheel is now right sized for the current market and is structured to best meet the needs of its real estate customers.
Istithmar World is the investment arm of Dubai World. Istithmar World divisions Istithmar World Ventures and Istithmar World Capital have been merged and Istithmar World’s activities are now focused principally on the ongoing management of assets already acquired by Istithmar World, with the aim of maximizing the value of those existing investments. In addition, Istithmar World will manage the assets of Dubai World Africa in addition to the Victoria & Alfred Waterfront in Cape Town, South Africa.
Retailcorp World is the newly created retail management arm of Dubai World formed from a division of Nakheel. It will manage all of the UAE-based retail activities within the group, including shopping malls, food and beverage outlets and distribution, hyper markets, and retail and food and beverage outlets in South Africa formerly managed by the Nakheel Retail division.
Other Key Subsidiaries
Drydocks World and Ports and Free Zones World, which is made up of DP World, Economic Zones World and P&O Ferries, have maintained their current structures and are well positioned to weather the downturn and continue to progress despite the more difficult environment.
Internationally focused real estate developer Limitless has also been rationalised and reorganised. It is now focused on maximising value through managing its investments in five development projects internationally, in Saudi Arabia, Jordan, Russia, China and Vietnam, as well as the mixed-use development Downtown Jebel Ali in Dubai. Further overseas projects are dependent on market conditions.
© 2000 - 2019 Al Bawaba (www.albawaba.com)