|Shah Rukh, Hrithik
Mumbai, Nov. 28: Like celebrities around the world, Bollywood stars are caught up in Dubais spiralling debt crisis which has wiped off much of the value of their dream homes in the city celebrated as a nirvana for the rich.
From Shah Rukh Khan to Hrithik Roshan and Kareena Kapoor, Suniel Shetty, Salman Khan and Saif Ali Khan, most top stars have stakes in the Dubai property market. As Dubai struggles under a mountain of debt, these celebrities, along with those abroad like footballer David Beckham and actor Brad Pitt, could see the value of their property plummet.
Most of them invested when the property boom in Dubai began two to three years ago. It was an international destination and property prices were lower than in Mumbai with a promise of massive appreciation in future. Bollywood had come in droves then to invest in Dubai, said an official in a leading real estate agency, which has helped many Mumbai celebrities scout for property in the oasis city.
Amid the gloom, a note of optimism was sounded today by Abu Dhabi, the richer but less-heralded capital of the Emirates. An Abu Dhabi official was quoted by Reuters as saying that it will pick and choose how to assist its debt-laden and profligate neighbour.
Real estate prices in glitzy Dubai went into a freefall following the credit squeeze in the West. Experts said Dubais fragile real estate market could suffer another collapse after the city-state asked for a standstill on the debt repayment of the state-owned Dubai World and its struggling real estate unit Nakheel.
In September 2008, Nakheel had grandly gifted Shah Rukh a $1.8-million (about Rs 8 crore), 5,000 square feet villa in the citys ultra-posh township The Palms.
That property would now be worth half that amount, says Rajesh Rohera, a Mumbai property consultant. An estimated 50 per cent has been wiped off the average price of real estate in the Emirates since its peak. Though in recent months, prices had shown signs of stabilisation ó and even modest recovery ó it is being projected that after this debt crisis, Dubai property prices could drop a further 30 per cent over the next 18 months, said Rohera.
If thats not bad enough, experts say it may take at least 10 years for Dubai realty to recover to peak levels of 2006-2007.
Property consultants said Shah Rukh, who is believed to have invested in various businesses in the Emirates, including developing a real estate project called Shahrukh Khan Boulevard at Al Dana island near Dubai, may wish to rethink his strategy for businesses in the Gulf.
There will be a negative impact on Indian developers in Dubai, since this is a situation where prices are expected to come down there. These players would have acquired projects to sell them at a particular price. With pricing taking a beating, the profitability of these projects reduces, said Anuj Puri, country head of property consultants Jones Lang LaSalle Meghraj.
SRK apart, Bollywood stars and Mumbai celebs such as Salman Khan, Shakti Kapoor, Sunil Gavaskar, Ravi Shastri, M.F. Husain, Kareena Kapoor, Rani Mukerji and Katrina Kaif are among those who bought Dubai properties.
The crisis has also put a question mark on Indias first off-shore Bollywood-based theme-park project.
Yash Raj Films had entered into a multimillion-dollar joint venture with investment company Dubai Infinity Holdings in July 2008 to create the worlds first large-scale entertainment district featuring Indian cinema.
The debt debacle in Dubai will slow down the project as Dubai Infinity Holdings may rein in their purse in such a climate. It is a massive project in the league of Universal Studios theme parks. It is slated to include a theme-park, a film palace, boutique hotels and other entertainment and leisure concepts based on films produced by YRF. But we do not have any plans to pull out of the project as yet, said a source at Yash Raj Films.
Earlier this year, Aalim, the favoured hairdresser of Bollywood leading men, opened his first international outlet in Dubai. His outlet is part of a luxury lifestyle department store floated by Suniel Shetty called Crossover Bollywood Se.
Most Indian designers like Rohit Bal and Tarun Tahiliani now retail in Dubai, while others ride the Bollywood craze in West Asia and retail out of boutiques like Kimaya in Dubai.