Global economic slowdown has hit the Taj group’s international expansion plans in the west Asian region. Two projects — Taj Resort Exotica and Spa in Saraya Ras Al Khaimah at the northern tip of the United Arab Emirates (UAE) and a 500-room, 5-star Taj Palace hotel proposed to come up in YAS Island, also in the UAE — have both “slowed down and are expected to commence after only a year,” said Taj officials. “Every developer in the UAE has a bit of a funding issue and these two projects are no different,” said a senior official.

The YAS Island luxury resort hotel was scheduled for completion in 2010 while the Ras Al Khaimah project was scheduled for completion by end 2011. So far, the Taj has maintained that its hotel projects under development have not been impacted by the slowdown. This is the first admission by its management that some of its projects have been impacted. YAS Island is coming up over 2,500 hectares, of which 1,700 hectares is being reclaimed for development. The island is expected to feature attractions such as a world-class motor sports racetrack, signature hotels, a Ferrari theme park, water park, a 300,000 square metre retail area, parkland golf courses, lagoon hotels and so on.

The island is being developed by Aldar Properties, a real estate development, management and investment company. The $40 billion project is about 10 minutes drive from the Abu Dhabi airport, about 30 minutes from downtown Abu Dhabi, and about an hour from the Jebel Ali end of Dubai.

Experts say that most real estate developers in west Asia, including those backed by the sovereigns, may have over-extended themselves in the bull days by taking on more projects than what their balance sheet could afford. With property prices nose-diving and fresh speculative demand fizzled out, executing many of these projects in the Gulf state’s has become a challenge.

An e-mail sent to Aldar Properties did not elicit a response.

The Taj Exotica Resort & Spa coming up at Saraya Islands, Ras Al Khaimah, is scheduled to have 180 guest rooms, including suites, 30 bungalows, two restaurants, conference facilities, a spa and health club. Saraya Islands is located between the Hajjar Mountain range and the azure sea of the Arabian Gulf. The project is composed of four islands and a main village, occupying 5.5 km of a long natural island. An email to Saraya Holdings also did not elicit any response.