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The New Year’s Eve blaze that gutted a significant portion of The Address Downtown luxury hotel has raised questions whether or not it will impact Emaar as one of the leading brands in Dubai’s property industry.
When the markets opened on Sunday, the real estate developer’s shares tumbled 2.5 per cent at Dh5.55, even after a press statement assured that the fire will not have any “material impact” on the company.
“The building and risk of fire are covered by insurance, so there should be no material impact on the company as a result of this incident,” Emaar said in a statement. No deaths were reported as a result of the fire, which took several hours to control, and the developer assured that it would rebuild the 63-storey hotel.
Following the incident, Arqaam Capital reduced its forecast for the company’s earnings per share in 2015 by 2 per cent and 2016 revenues by 1 per cent, according to a Reuters report.
Colin Beaton, managing director of Limelight Creative Services, said that the New Year’s Eve incident will not have any impact on Emaar as a brand, but the developer could undertake a set of actions to avoid any negative publicity.
Beaton noted that there is a “clear separation between the Emaar brand and The Address hotel brand.
“Many people are likely unaware of the connection. Although the Emaar brand is clearly on display throughout Downtown Dubai, the linkage to the Address and any kind of associated liability is minimal,” Beaton told Gulf News.
“The Address stands as its own brand, Emaar sometimes provides brand endorsement but it is not a primary component of the hotel brand. In the local professional real estate development community, everyone would be aware and perhaps there may be some negative feedback, but this community is small and this perception will also be countered by Emaar’s documented reputation for delivering very good quality developments with an excellent track record of success and safety.”
Nevertheless, Beaton said the best course of action involves transparency and quick response. “Tell the truth about what happened. We have seen too much secrecy with regard to negative events in the past, people respond much better to transparency and honesty,” said Beaton.
He said the public should be updated on what Emaar intends to do to “minimize or eliminate the possibility of it happening again.”
“Fix it fast and help the people that were impacted. Legal or insurance delays (such as the JLT fire from two years ago) are no excuse and are poorly received. Accept responsibility and get on with preparing the damage both to the building and any losses/ costs for the individual affected guests, owners [or], staff.”
Mohamed Alabbar, the company’s chairman was quoted as saying on Saturday that the building will be restored “to all its glory and even surpass the splendid architectural standards.”
"We develop our projects to the highest standards of quality and as per international best practices,” Alabbar added.
The fire broke just hours before New Year, leaving the hotel’s façade facing the Burj Khalifa tower seriously gutted. Affected guests and residents have been provided with alternative accommodations.
"Our immediate priority was ensuring the safety of our guests and colleagues, and we evacuated all of the safely in record time in a most orderly feashion. The authorities also ensured the safety of the hundreds of thousands of visitors to Downtown Dubai," Alabbar said.
"All our guests and residents have been relocated across various Emaar and other hotels in the city. We have set up a dedicated team from different departments of Emaar to ensure that all requirements of our guests are being met immediately."
Emaar appointed on Sunday a construction company to restore the gutted building "in record time." Dutco Group, which has a number of mega projects in its portfolio including the Dubai Mall, has already mobilized a team of international consultants to start the clearing, assessment and restoration work.
"Clearing work has started with the mechanical, electrical and structural assessment of the building and restoration [is] also underway," the company said in a statement.
"We are committed to expediting the reopening of the hotel in line with the directives of His Highness Shaikh Mohammad bin Rashid Al Maktoum. We are demonstrating the can-do ability of Dubai with our focus on opening the hotel in record time using the best design, quality and technology," said Alabbar.
Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com