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Berth boom
With Palm Jumeirah's Anchor Marina set to open in December 2008, Michael Horrigan, CEO of IGY for the Middle East and Europe explains why it's plain sailing for marina developments.
Over the next five years, international marina developer Island Global Yachting (IGY) anticipates Dubai will become home to a further 20,000 berths - a figure for the Palm island developments alone, which will amount to a 200% increase on those available in the emirate's existing marinas.
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So far, IGY has announced plans for 665 berths from that figure; 590 will come from the soon-to-be-operational Anchor Marina, while the remaining 75 will be constructed as part of its recently unveiled mega yacht marina, adjacent to the Trump International Hotel & Tower.
Both will be open solely to the residents of Palm Jumeirah.
To get window and concrete supply is a huge challenge in the market, and it’s one of the things that penalizes the building industry so strongly here.
"The reason Ferretti and a lot of boat brokers and builders are coming in is the fact they know demand is huge, but it won't be manifest until the berths are available. There's still a three year waiting list at Dubai International Marine Club," he explains.
Horrigan describes how many Dubai-based boat owners are forced to keep their vessels as far away from their homes as Sharjah, while they wait for space in local marinas or for new developments to open.
Founded in 2005, IGY opened its Dubai office in 2006 and currently has 24 marinas under management and development around the world.
Its Dubai branch is currently working exclusively for Nakheel, having been contracted for all the developer's marinas. Prior to this partnership, IGY worked on the marina at Al Futtaim's Dubai Festival City and the Al Seef Marina on the Dubai Creek.
Abu Dhabi
At this year's Cityscape Dubai, Abu Dhabi-based developer Aldar revealed plans to build 14 marinas across the emirate, with a combined total of 3,500 berths.
"State-of-the-art operations will exceed customers' expectations at every level and integrated land side facilities will enhance destination boating," says Ronald Barrott, former CEO, and now advisor to the chairman of Aldar.
One of the most prominent marinas developed will be Yas Marina, constructed as part of the Yas Island project. It will be surrounded by the Formula One rack track and provide berthing for yachts up to 100m long.
Prime location
Though he holds mixed opinions of the marinas currently in operation, Horrigan believes the majority of new developments will be of a superior quality and hopes they will set a precedent for the future.
The Dubai industry is going to be very much a self-regulating industry. It will only ever be as strong and as forthcoming as the amenities that are there for people who want to buy boats," he says.
Although Horrigan declines to disclose the average lease rate for one of their berths at Anchor Marina, he reveals marinas developed by IGY are setting a benchmark,
"Our prices are higher than anything else that has been achieved in the market. That's because of the quality of our berths, the clubhouse amenities and because it's adjacent to people's villas and homes." The location of these berths is perhaps an example of the "anything-is-possible" culture that brought three man-made palm tree shaped islands to the world.
"This is one of the few areas where you could own a villa or a house with berthing immediately in front of you. Most of the other global markets have been priced-out of that possibility," Horrigan explains.
But what should happen if the boat- and home- buyers become diluted in a sea of over-supply? Horrigan is confident it would not affect his company's immediate future.
"I think what you're talking about could potentially impact what new developments will come online, but we have a five year backlog from the developments that are already in place and existing. A five year backlog is an unusually strong pipeline for a company," he claims.
"If there is an impact on the residential market, it would mean that maybe five years from now there will be a different demand for the amount of berths. So it could affect the five to ten year projection, rather than zero to five."
Perhaps in its favour, IGY also operates in Abu Dhabi and other areas of the Middle East, which could insulate it against a stall in the Dubai market.
From the point of view of a developer in Abu Dhabi, Barrott believes Aldar has allowed for any change in demand on his turf,
"Aldar's marina projects are designed to accommodate phased development, in order to adjust to market fluctuation."
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