For the second time in seven months, the Dubai-based parent company of Smart City Malta has seen its credit rating downgraded by Moody’s because of real estate concerns.

The ratings agency said in a statement it had “downgraded to B2 from B1 the senior unsecured issuer and debt ratings of Dubai Holding Commercial Operations Group (DHCOG)” on continued concerns over real estate, AFP news agency reported.

The company, which belongs to Dubai ruler Sheikh Mohammed bin Rashid al Maktoum, owns, among others, Dubai Properties Group, Tecom Investments and Jumeirah Group.

Tecom Investments is the major investor in Smart City Malta, in which the Maltese government has a nine per cent shareholding, and in Go plc.

Just two weeks ago Tecom issued a two-sentence statement insisting it was committed to Smart City Malta and reiterated the project was on track to be inaugurated on October 10.

“Any news related to other Dubai Holding entities has no impact on Smart City Malta or its operations,” the statement said.

Tecom did not say what it was referring to but international media had reported that Dubai International Capital, the private equity arm of Dubai Holding, had asked creditors for a three-month extension on a $1.2 billion loan.

In the latest credit downgrade, Moody’s said the ratings remained under review for further possible downgrade, adding that any future positive outlook on DHCOG were subject to a “recovery” in “Dubai’s weak real estate market”.

Last year doubts had been raised about the strength of the Smart City Malta investors after a visible slowdown in construction progress. The Finance Minister had confirmed that the global recession had left its mark on the Malta investment but it was only of a temporary nature.

Tecom bosses later reaffirmed the company’s commitment to see the Smart City project at Ricasoli in Kalkara through.

Smart City Malta will be a self-sustaining village comprising high-end residential properties, office blocks and commercial outlets. Company officials have not yet announced the names of prospective tenants for the first office block that should be functional by October.