There are a lot of “negative messages” swirling around The World archipelago off the coast of Dubai, developer Abdulla Bin Sulayem, admits.
The cluster of 300 manmade islands built by Nakheel a decade ago has barely been developed after the global financial crisis caused work to grind to a halt. Numerous disputes, particularly with Nakheel, which has been accused of not providing required infrastructure, has stifled much progress. To date just three islands have seen development.
But Seven Tides International, a luxury property developer and holding company established by Abdulla’s father and the company chairman, Sultan Bin Sulayem, is set to begin work on a fourth island.
Seven Tides spent tens of millions of dollars buying 10 of The World islands in the South America cluster, including Buenos Aires, Bolivia, Argentina, Chile and Falkland. Now that it has completed its on land portfolio, including the recently opened Dukes Hotel on The Palm Jumeirah, it will begin developing the offshore projects, starting with a luxury resort on one of the South American islands, closest to the Dubai shoreline.
Bin Sulayem, who runs Seven Tides as CEO, says he is planning to build a low-rise, 60 villa luxury resort, including a signature restaurant, all-day dining venue, spa and water activities. The operator is yet to be named.
“You will have the skyline of all of Dubai. One of the closest ones [to the shoreline],” Bin Sulayem says. “It’s five minutes distance from the Jumeirah Marina Port and it’s less than 15 minutes from Anantara [The Palm Dubai] by boat. If you’re staying on the island and you want to go shopping, we can drop you to the closest point to Dubai Mall.”
Work has started and is expected to be completed in “less than a year”.
The Great British Restaurant is popular among the UAE's thousands of residents from the UK.
“We have built a few mock-ups and we’re studying with a potential hotel operator, and testing a few things to ensure that once we build it, it lasts a long time,” Bin Sulayem says, referring to concerns that the reclaimed sand used to create the island may gradually disappear.
While the timeline appears to be incredibly ambitious, he says planning for the project began three years ago. The long lead-in time allowed Seven Tides to test the new construction method that enabled the developer to erect one of the ‘mock-ups’ — a complete villa — in just three weeks.
Bin Sulayem is coy about the method of construction, or what it entails. He says it will be revealed later this year, but insists they will be durable and have been approved by all authorities.
To get a sense of what they will be like, Bin Sulayem cites the Maldives, the basis for his research and concept.
“I noticed from most successful hotels [in the Maldives], that they have built their landscape in a way that if you have your villa there, if it’s a beach villa or water villa, the moment you leave your balcony, you feel you’re the only person there,” he says.
“They’ve built the landscape to add as much privacy as they can. This is the key to the success of that hotel. So we need to be careful and really be successful with the landscape design, this is really important.”
The three years also has been about Seven Tides understanding what the new concept will involve, including the cost of such a unique construction project, where all building materials must be transported by boats.
Bin Sulayem says he has studied the potential average room rate and occupancy levels, and considered a future operator. He seems to hint that the operator could well be a brand such as Anantara, which manages Seven Tides’ highly successful Palm Jumeirah resort.
Movenpick Hotel Ibn Battuta Gate is among Seven Tides' portfolio of hotels.
“Because we have existing hotels, it doesn’t mean that I need a head chef there, so my costs will go down even further. I don’t need a general manager there, either. It could be a subsidiary of this hotel [Dukes Hotel Dubai], or another hotel within our portfolio, so my costs go lower even further,” he says.
“I don’t need electricity — we will build our own generators, we will build our own water-maker and our own sewerage treatment plant, so we will be isolated completely. That took a lot of time and effort to gather a lot of information to perfect the idea that we want to build there.
“After we do that, it will be unique because it will be the first hotel on the islands and it will prove that this island can be successful if you know what you are doing.”
While the Maldives has crystal clear waters, he insists that Dubai’s skyline, boasting the Burj Khalifa, Burj Al Arab and The Palm, will attract visitors.
Bin Sulayem says they have thought of everything, including a boat capable of travelling in rough waters. “We found a boat that’s built in Abu Dhabi by a local company to withstand waves of around ten feet,” he says.
Our interview takes place in the newly opened Dukes Hotel on Palm Jumeirah. On the day we visited, the impressive chandelier hanging in the foyer is masked by an indoor scaffolding that has been erected to make some last minute adjustments.
Staff are huddled in pockets, receiving final instructions as the latest addition to Dubai’s long list of five-star hotels gets ready to welcome its first guests.
Anantara The Palm Dubai’s two-bedroom apartments have 164 square metres of space.
Located on the western side of Palm Jumeirah’s trunk, Dukes Hotel is Seven Tides’ fourth to join its hospitality portfolio, alongside Mövenpick Hotel Ibn Battuta Gate, Anantara Dubai The Palm Resort & Spa, and the flagship Dukes Hotel in London’s Mayfair, which was acquired by the Dubai company in 2006.
Dukes Dubai was an unnamed hotel project that was put on hold when the crisis hit. While the 644 residences in the adjacent Oceana apartment development were delivered in 2009, the hotel was stalled and remained a covered-up shell built on top of a podium until 2014, when work resumed.
“At that time, we didn’t assume it would be a Dukes Hotel. But during our thought process with the chairman, we thought when you’re opening a hotel in Dubai, you need to stand out. You will be lost if you have a normal inventory with all of the hotels that are coming here. Which is good, we like competition,” Bin Sulayem says.
That same philosophy was applied to the 88 lanterns inside the Ibn Battuta hotel and the lagoons and over-water villas at Anantara The Palm. Bin Sulayem says while the Dukes Hotel may look like an ordinary building from the outside (additional external features are being added), the developer has ensured the inside is memorable.
“With the decoration, our designer went to [Dukes Hotel] London, looked at all the rooms and hotel facilities and came up with a design that really impressed us,” he says.
“It’s different from most other hotels here [in Dubai]. It’s the wow factor. When you enter you see this huge chandelier in the lobby. It’s about to impress our guests.”
The chandelier, at a cost of “around $100,000”, is an investment, Bin Sulayem insists. “It was expensive but we felt that it was worth it because a hotel is like a home for guests so you need something impressive. The first impression is very important. We invested money in something that will really add value to the hotel,” he explains.
Anantara The Palm Dubai is the only resort in the emirate to include 18 over-water villas, as well as 11,000 square metres of lagoons.
“Some [hoteliers] will invest in a super expensive painting that no-one really appreciates. In the Atlantis they have this huge [piece of] art, it’s a feature, and people come and take pictures and post it on social media. So investing in something like that really makes it worthwhile because with all of the posts, people do the marketing for you on their social media.”
Currently, Great British Restaurant, Dukes Bar and West 14 are the dining venues open, but they will be followed by high-end Indian restaurant Khyber (early April), and the Cigar and Whiskey Bar and the Champagne Lounge (mid-April).
The delay in completion also allowed Seven Tides to install fire-safety cladding under new regulations that only came into effect in January. All of the hotel’s façade has been replaced.
Bin Sulayem says there is a similar plan available for the owners of the Oceana residences, where a fire occurred last December, but he says it must go through home owners association for approval for similar cladding replacements to be carried out at their expense.
“With a homeowners association, they have a budget and as part of that they have a sinking fund to replace things. They are aware of it and it is at their cost,” he says. “The technology wasn’t there before, but now there is something there that is better fire-rated.”
Despite challenging times for the hotel industry, Bin Sulayem insists that Seven Tides’ hospitality operations remains strong.
“As much as Dubai has, and as much as more inventory is coming to the market, we’ve never seen a downside in our figures. Maybe sometimes we don’t achieve [our targets], and sometimes we’re 5 percent maximum below what we expected to achieve. It has always been an upward trend in terms of our revenue and occupancy level,” he says.
Those targets are in the high 80s for all properties. At Anantara, he says, most weekends are fully booked.
The interiors of Dukes Dubai serves a relaxing backdrop for diners.
As owners of the Dukes Hotel brand, Bin Sulayem says Seven Tides has thus far resisted “four or five” offers to operate properties under that brand for other investors.
“As far as Dukes as an operator is concerned, wherever there is an opportunity that we feel we can add value to we will enter that market, if it means that we invest in building a hotel and operating it ourselves, or we operate on behalf of owners,” he says.
“Operating on behalf of an owner is like a marriage — you need to understand who you are operating it for. We’ll be very selective if we find an opportunity to operate on someone’s behalf.”
There are discussions, however, regarding developing property projects — “buildings and towers” — on Dubai’s mainland. “We have a few things in the pipeline; nothing has been confirmed yet,” Bin Sulayem reveals.
He describes the Dubai property market as “mature” and says people are more cautious about making investments.
“The reason I don’t want to announce any project before I start construction is because I want to show our credibility to the market,” he says. “I don’t want anyone to sign something and [only] after five years you get your unit. I want people to sign an agreement when they see the construction happening, which gives them extra comfort.”
Bin Sulayem says while the marked slowdown in 2015, which affected Russian investors in particular, impacted Seven Tides’ property business, the current sales are “healthy”.
“The units that we sell here, especially the beach products, attract a lot of Russian customers, but now that it costs them more than double per unit, we’ve lost [customers]. We have sold units to a Russian investor, but he’s a local investor who already has his funds here.
Dukes London was awarded the ‘World’s Leading Classic Hotel’ at the World Travel Awards last year.
“The healthy slowdown also allowed us to expand into different regions. We found bigger potential in the GCC that covered the gap when we lost the Russian market.”
He insists that there is still strong demand in Dubai’s property market, with Seven Tides concluding a number of high-value deals for tens of properties in the last year.
“We’re talking about anywhere between AED20m and AED90m [for each deal],” he says.
When Seven Tides was created in 2004, the family intended to go to the international market and grow a portfolio of hotels and resorts outside the UAE. But global economics would have it differently and Bin Sulayem says the plan now is to focus locally for the immediate future.
“Our main focus will lie in Dubai. If there is an opportunity that’s very attractive somewhere in the international market, we will definitely jump into it, but as of now there’s nothing to mention,” he says.
The company still has apartments left for sale at its current developments: more than 20 percent in the Anantara residence and a handful available at Dukes.
The immediate focus is on the first The World island project. Then Seven Tides intends to develop all of the remaining nine islands, one by one.
“We’ll build this first, keep it running, then start immediately with the second one, and third one and fourth one,” Bin Sulayem says.
“We might not build hotels, we might build [villas] on one island and rent each villa. It will have its own marina. So if we build 20 villas, we rent them to high individual net worth customers who enjoy the sea, the beach, and fishing boat, or whatever they have.
“It’s really peaceful there. You sit there and don’t listen to any cars — nothing. Just switch off.”
A little piece of paradise that may well make a big enough splash to entice back other The World island owners.