Aldar Properties has had its credit rating lowered by Moody's as Abu Dhabi's largest property developer faces weakening demand for new homes and offices in the emirate.
The agency cut its rating on the company and debt instruments worth about US$2.3 billion (Dh8.44bn) by two notches to Baa2 because of the impact of declining activity within the residential and commercial property markets.
The small number of transactions in the market had raised questions about future cash inflows and how the property developer would repay loans and other obligations coming due beyond this year. Aldar was unavailable for comment.
"Despite the fundamental shortfall in residential units, the transactional landscape has come to a halt in terms of [new] residential unit sales and land transactions," said Martin Kohlhase, a Dubai-based analyst with Moody's.
While Moody's said it remained "confident" about Aldar's "strong cash position" - the company had about Dh11bn in cash at the end of September - it was worried about the amount of debt coming due next year and in 2012.
"Their cash should bring them through 2010 when they have moderate debt maturities," Mr Kohlhase said.
He anticipated "unit and land sales volumes to be cumulatively much lower over the next 24 to 36 months than had originally been anticipated".
Abu Dhabi property prices have fallen by as much as 30 per cent from their peak and developers are under pressure to avoid flooding the market with an oversupply of completed units.
In the commercial market, demand for space remains muted after the economic downturn, while available office space is expected to increase by 19 per cent this year, say analysts.
On the upside, Moody's acknowledged that orders for large public infrastructure projects from the Government, along with "land transfers [from the Government] on favourable terms", have become a proportionally more important driver of the company's revenues and cash flow. On the downside, it stated an increased risk that any deviations from the company's business plan "in terms of cash flow receipts for commercial projects" could cause future funding gaps.
Mr Kohlhase stressed the downgrade was unrelated to the question of government support, an issue that has been raised by both Moody's and other agencies in relation to their assessment of government-related entities.
"The ratings are still under review with regard to the government support assumptions."
On December 9, Moody's placed Aldar and six other prominent Abu Dhabi companies on review for a possible downgrade over the issue of government support. At the time, it said it could no longer be certain whether it could assume blanket government support for these companies.
Aldar Properties has the largest land bank of any developer in the emirate and is currently developing an area equivalent in size to one third of the existing city. It has completed some of the emirate's most ambitious projects such as Yas Marina race circuit and is developing Al Raha Beach and the Central Market development.
But the developer has struggled to fill its own headquarters building. More than half of the space available in the 23-storey tower is unleased.
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Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”
Pearls on a Branch: Oral Tales
Najlaa Khoury, Archipelago Books
Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
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Killing of Qassem Suleimani
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Michael Beckley, Cornell Press
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