Dubai-listed Deyaar Development has scrapped its Enclave project in Dubai and put a deal in Saudi Arabia on hold, its CEO said in comments published on Wednesday, as the downturn in the Gulf real estate market sees further project cancellations.

"We had to cancel the Enclave. Although the project was good, it was launched at a very inopportune time,” Markus Giebel was quoted as saying by UAE daily Emirates Business.

“As a developer we had to be fair and so we returned 100 per cent of our investors' money. We will be happy to review the decision if the market comes back.”

Enclave, unveiled in October 2008, was to be built in Dubai’s International Media Production Zone (IMPZ). It was to comprise nine residential buildings.

Deyaar owns several plots of land within IMPZ.

The global financial crisis has battered Dubai’s real estate market, sending property prices spiralling downwards and forcing developers to axe billions of dollars worth of projects as demand and financing dried up.

Giebel said Deyaar had signed an initial agreement for land in Saudi Arabia, but decided not to go ahead with the deal. Emirates Business did not specify who the agreement was with or where in the kingdom the land was located.

"We did investigate some land use in Saudi Arabia, but as the financial crisis went on we found that we could get some better deals. Although we had signed an MoU (memorandum of understanding), we decided not to do the deal, as we believed it was overvalued," he was quoted as saying.

In February, Deyaar, of which almost 41 percent is owned by Dubai Islamic Bank, announced that it was putting at least a quarter of its projects on hold after the financial crisis hit Dubai.

Deyaar posted a 73 percent decline in first-quarter net profit to 54.48 million dirhams.