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13/08/2010 - Dubai World sells London Grand Buildings for 172 million UK Pounds  13/08/2010 - Dubai World sells London Grand Buildings for 172 million UK Pounds

Istithmar, the investment arm of Dubai World, has sold the prestigious Grand Buildings located in the West End of London. The property was bought by an unnamed Russian investor for £172 million (268 million USD).

Built in the 1870s, Grand Buildings was bought by Istithmar in 2005 for £155 million (242 million USD). The property includes retail outlets and office space currently let to Enterprise Oil.

Over the last five years Dubai World has built an impressive portfolio of investments in North America, Europe, Asia and the Middle East.

However, the company ran into financial difficulties in November 2009 as a result of the rapid decline in the Dubai real estate market.  At this time Dubai World was shown to have debts of approximately 60 billion USD and was unable to meet the December 2009 deadline for a 3.5 billion USD loan.

As a result the company entered into negotiations to restructure its debt with several banks.
 
In May this year a co-ordinating committee of seven leading banks agreed to a “stand still” on large chunks of the $60 billion debt.  The committee, which holds sixty percent of the debt, hopes to reach an agreement for repayments later this year.  The rest of the debt is owned by seventy three other banks.

Dubai World has insisted that the terms of the restructuring would mean it could wait to sell assets at a better time.  Although this remains to be seen as the sale of assets has already begun.

In November last year Dubai World sold two of its’ London properties for £10 million (15.5 million USD).  The sale of their Inchcape Shipping Services business also looks likely.







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