Updated: Emaar pull out of Indonesia project

Lombok Island

Emaar Properties may have shot themselves in the foot. With all the difficulties they are facing in the emirate, comes news that they have pulled out of a $600 million project in Indonesia without giving a reason for the exit.

The project was to be a 'mixed-use' site on the Indonesian island of Lombok to be developed with Perusahaan Pengelola Aset. The deal was signed in 2007.

Emaar even said last month that with the construction industry stalling in Dubai, they would focus on mid-income housing in emerging markets and overseas expansion to boost 2010 revenue.

However, the recent pull out seems to indicate the company is suffering financial difficulties that it has not let on, echoing when it pulled out of a US$20 billion development in Algeria in 2009 as a result of the economic downturn.

Indonesia haven't wasted any time with Emaar leaving and have already re-tendered the project internationally with several other Gulf companies and a large Indian firm showing interest in the development.

Updated information

Since the above was posted, Emaar Properties have said it is continuing with the project saying it had "provided recommendations on how it intended to proceed with development of a $600 million mixed-use project in Indonesia."

The developer said it was waiting for responses from the Bali Tourism Development Corporation (BTDC) and Indonesia's government.

"Indonesia represents a target growth country for the company," it said, adding it had submitted an expression of interest to the BTDC in accordance with a tendering procedure recently launched by Indonesia for the Mandalika development on Lombok Island.

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Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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