Auld Laing’s Sign–For Sale?
Is John Laing Homes for sale?
The question came this past week from a highly placed executive with specific knowledge of deals and distress in the debt-plagued universe that is production home builders.
Dubai-based Emaar Properties bought the blue-chip Newport Beach, Calif.-headquartered private home building operation for $1.05 billion in late-spring 2006, when the residential market was peaking like Emaar’s work-in-progress Burg itself. [add your crashing sound-effect here].
The company’s long-time CEO Larry Webb departed in Spring 2008, only two years through a five-year contract to stay on at the helm. He’s now on LandSource duty, trying to get dollars for land assets that logically will regain value once there’s a flicker of heat back in household growth in the Santa Clarita Valley.
Emaar’s plan with Laing was to secure a North American foothold, and then run like hell to grow three to five times John Laing’s original size within five years.
Plan B?
Not so long ago, it was rumored that Emaar and Lennar might go far in talks to co-star in a home building world drama, with Emaar the buyer.
The crazy way that things are now working, Lennar might no sooner divest of its LandSource Newhall Land & Farm gem, and emerge as a potential acquirer of what’s become of Emaar’s John Laing. Loonier scenarios have played out.
One thing is certain. A North American foothold could turn into a stranglehold that snuffs the life out of one of the world’s most powerful construction companies; it’s weathering it’s own storm at home.
- Here’s the Wall Street Journal on how much fun it is to be in Dubai these days.
Dubai’s economy is particularly sensitive to property prices. The real-estate, construction and finance sectors together account for close to 40% of the city-state’s gross domestic product, according to a recent Merrill Lynch & Co. estimate.
In a market dominated by residential real estate, average home prices fell 8% in the fourth quarter last year from the third quarter, according to a price index released Tuesday by property consultant Colliers International. That’s a dramatic turnaround in a year in which average prices finished 59% higher, even with the fourth-quarter drop.
The Dubai property market’s weakness threatens to seep into other critical sectors of the economy, including banking, which just a few months ago seemed relatively sound. Moody’s Investors Service on Tuesday warned of weakening fundamentals for banks across the United Arab Emirates, which is made up of seven semiautonomous emirates including Dubai.
Laing builds quality residential communities; and markets itself better than most other companies. It also plays where the stakes are as high as they get, and its dirt has shown a boundless appetitite for talent and other expense lines as the builder tries to slash its way to a tolerable margin.
Hello, hello… don’t know why you say Dubai, I say hello.
Comments
One Response to “Auld Laing’s Sign–For Sale?”
Leave a Reply
Hi dear ,
Some really helpful information here. I Like of your website design . Did you make this template yourself or did you get it from any templates websites? Looks pretty cool for me . I use Joomla but wants something better.
Mohamed Ali Alabbar, Chairman of Dubai’s Financial Advisory Council and Emaar Properties, believes the fall in property prices in the emirate will average 20 per cent. He said the Dubai Government was handling the real estate situation by studying projects that would be cancelled or postponed or were continuing and would take appropriate action.
In an interview with Al Khaleej daily, he stressed that important decisions had been taken by the authorities to inject liquidity, guarantee deposits and increase Dubai’s budget to ensure the completion of all infrastructure projects.
Dubai Properties