Yu Tao, the man responsible for around 5,000 construction workers as CEO of China State Construction Engineering Company’s (CSCEC) Middle East operations, is a big fan of Dubai’s Palm Jumeirah.
The development is the main reason he is in Dubai, he explains to Construction Week at a meeting at the company’s regional HQ. Until 2004, Tao headed CSCEC’s operations in Singapore, but he decided to move to Dubai “when my boss showed me the concept of the Palm Jumeirah and said would you like to work in Dubai on this particular project?”.
“That’s where China State started our operation nine years ago. Our first job here was Palm Jumeirah villas.”
Since then, the company has become something of a regional powerhouse, using the vast resources and experience at its disposal as one of China’s biggest contractors to win technically-difficult and challenging projects. To date, it has completed around $4bn (AED: 14.6bn) worth of projects in the region, and has just made its first major investment as a developer - taking a stake in Skai Holdings’ new $1bn Viceroy Hotel on Palm Jumeirah.
He said that the company, which recently moved 20 places up the rankings on the Forbes 500 Global list of the world’s biggest companies from 100 to 80, is best known outside of its home market as a contractor, but “is one of the most prestigious brands in China as a developer”.
Tao did not reveal how much of a stake it had taken in the Viceroy Hotel project, but said that CSCEC’s decision was taken very quickly.
“We moved extremely fast. I took probably ten minutes to make a decision.”
Of course, it takes longer for deals to be signed, but even then Tao said CSCEC finalised a deal “in less than three months”.
It was attracted by the “iconic” design from P&T Architects, as well as its location.
“I think the Palm Jumeirah is quite a mature, high-end market,” Tao said. “In the region, in the world...most people know this fantastic island. It is the pride of the UAE and Dubai.”
The $1bn resort is being developed by a special purpose vehicle, ASSAS, created between the partners. It will contain 481 rooms and a further 221 Viceroy Residences suites offering views over the Arabian Sea. Skai’s model involves selling rooms to investors, who lease them back to the hotel and receive 40% of the revenues. It has already sold around $660m (AED: 2.4bn) worth of rooms, and has said that the prices attracted have continued to rise since their launch.
CSCEC began construction on site in June under a three-year programme that will complete in 2016.
The initial phase has involved excavation, shoring and piling work on a site where adding basements below the sea level on a reclaimed island is an engineering challenge, but Tao is confident of CSCEC’s ability to deliver.
“We have been challenged with even more difficult projects.
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