Dubai’s largest listed developer said that the insurance claim would mean that it could reverse a Dh301 million provision made in its 2015 accounts.
Emaar to receive Dh1.22 billion insurance claim on Address Downtown hotel fire
The Dubai developer Emaar Properties on Monday confirmed that it would recover Dh1.22 billion from an insurance claim over the dramatic fire at its Address Downtown hotel on New Year’s Eve in 2015.
Dubai’s largest listed developer said that the insurance claim from UAE-based Orient Insurance would mean that it could reverse a Dh301 million provision made in its 2015 accounts, Emaar said in a statement to Dubai Financial Market.
Emaar said that this would mean that the cash would be recorded as income in its fourth-quarter 2016 results, which are yet to be released.
The fire at the 63-storey tower, which has been closed since, was caused by an electrical short circuit on a spotlight, according to the police.
Emaar and Orient Insurance did not immediately respond to requests from The National for further information on the insurance settlement.
Three days after the fire occurred, Emaar said that the incident should have “no material impact” on the company because “the building and risk of fire” were covered by its insurance.
Emaar shares rose by 2.74 per cent in Dubai trading yesterday to close at Dh7.50 on the news.
Emaar’s 2015 fourth-quarter results missed analysts’ expectations because of the Dh301m writedown.
The hotel is expected to reopen in the middle of this year after Emaar hired Dubai-based Dutco Group as the contractor to undertake restoration work on the hotel in what it said would be “record time”.
Orient Insurance, which is part of UAE’s Al Futtaim Group, says it insures all of Emaar’s properties alongside regional and international reinsurance companies.
In December, Orient Insurance’s chief executive, Omer Elamin, said that his company had agreed the settlement after consultation with lawyers and insurance experts whose fees alone reached Dh50m.
News of the massive fire hit international headlines as the incident happened just before the start of Dubai’s New Year fireworks display at nearby Burj Khalifa, the world’s tallest building that was also developed by Emaar.
The fire sparked further concerns about the types of aluminium composite cladding panels used in high-rise buildings across Dubai that have been blamed for the rapid spread of fires.
It also helped to prompt tough new fire safety regulations that came into force last month.
The Address Downtown Dubai fire
■ Editorial: UAE’s new fire code addresses key safety issue
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