As financial crisis roiled much of the world in October 2008, the head of Dubais biggest state-owned developer unveiled his latest megaproject: a $38 billion development that would include a tower nearly two-thirds of a mile tall.
Im sure most of you are asking why were launching this, and youd be mad not to question it, said the executive, Chris ODonnell, at a news conference. Though there would be economic ups and downs in the years needed to build the tower, he told listeners, demand would continue to outstrip supply.
The fundamentals in the market are too strong, he said. There wont be a crash.
Since then, residential real-estate prices in Dubai have slumped by almost 50%. Developers have slashed jobs and scrapped projects. Groundbreaking on the tower was long ago put on hold. The yearlong retrenchment culminated in last weeks surprise announcement that Dubai would seek to restructure $26 billion of debts owed by Dubai World, the holding company for many of the governments port, infrastructure and real-estate businesses.
More : online.wsj.com
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