30th Nov 09
Brad Pitt and Beckhams caught in Dubai property crisis
by Katie Naylor
Football star David Beckham and actor Brad Pitt are believed to be among those caught up in the latest credit squeeze in Dubai as development group Dubai World have asked creditors for a six-month standstill on debt repayments worth $59 billion.
Just hours after announcing that it had raised $5 billion from two Abu Dhabi banks, the department of finance asked for a freeze until May 30th on all financing to Dubai World and Nakheel, which is due to pay back $4 billion on a bond in December.
The developers have been the driving force behind the emirate’s rapid expansion including the Palm Jumeirah and the World Islands, however it is now feared that it would be unable to complete the Palm Jumeirah, leaving one of the proposed landmarks a construction site.
About 2,000 villas and townhouses on the Palm went on sale in 2002 and sold out within a month, with celebrities including Brad Pitt and Angelina Jolie as well as the Beckhams being among those who are thought to have snapped up homes as Dubai became poised to be the world’s number one playground for the rich and famous.
Other famous buyers include English footballers such as Michael Owen, David James, Joe Cole and Kieron Dyer. Cole was one of the few who sold in time, selling his villa for £2.1 million last summer prior to the collapse of the Dubai property market.
The government of Dubai has done a lot of work to gloss over the crash, claiming recently that the population of the oil-rich state would rise by 400,000 compared with independent estimates which predict a sharp fall.
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