Dubai's GREs slowly tackling their debt problems

Over the past month Dubai’s government-related entities (GREs), which were at the heart of the Emirate’s crisis in 2009, have made further efforts to tackle their huge mountains of debt. The recovery in the real estate sector over the past 18 months has enabled property developer Nahkeel to repay $2.1bn of debt four years early. At the same time, media reports suggest that GRE-giant Dubai World has struck a deal with creditors to restructure its heavy debt burden. These latest developments are certainly encouraging and will help to lift some of the clouds that have up until now hung over Dubai’s near-term outlook. Nonetheless, while the debt repayment profile is now less onerous, the overall bulk of debt remains extremely large, meaning it is probably too soon to declare that the Emirate’s problems are completely behind it.