E-mail Article
Printer Friendly
Share Article
Berth boom
Construction challenges
According to Horrigan, the marina development sector is fortunate enough not to encounter the same difficulties as those faced by the construction industry. Having come from a construction background, Horrigan admits he is extremely relieved.
"Dubai is such a tough market. Construction costs are so unpredictable, getting contractors to bid your work for an apartment building or a hotel is one of the biggest challenges in the building industry here," he explains. With the scale of work undertaken in the emirate, it is perhaps easy to imagine the extent to which resources are stretched,
"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."
Thankfully, a number of international pontoon manufacturers have begun to realize the scale of work in the Middle East, and have arrived to bid for various contracts.
"They're all coming in wanting to get a share of the market, so we have competition for the bigger marinas that are coming online. Whereas the hotels, the apartments and the office buildings struggle to get companies who can and will bid their work, and who will give them a competitive price," he says.
Horrigan acknowledges IGY's contract for all Nakheel's marina developments is probably one of the reasons why pontoon suppliers and manufacturers are eager to tie-up with the company, admitting:
"There are a lot of people who are interested to show what they can do for us and for Nakheel."
In demand
Despite the current strain on resources in the construction field and weakening demand from foreign investors, Horrigan believes Dubai's property market will generally continue along the same successful route,
"Dubai's pull is that it's larger than life, if it drops anything short of celestial, you're seeing some impact. I don't think there's going to be a drop-back, but I think there's going to be a shift in the market," he says. Even with this shift in the market, Horrigan doesn't expect business to falter, as he sees demand for office buildings increasing,
"We've got a lot of hotels coming online, a lot of apartments online and coming online. I think there's going to be a big demand for office buildings in the future, but even office buildings are a user group for us. The businessmen, the CEOs and the highly placed movers and groovers equally want to see their boat berthed near their office building."
It would seem business has never been better for IGY in Dubai. Though, with the global financial crisis wreaking havoc, one would imagine marina development contracts are scarce in traditional yachting grounds like Europe. Quite on the contrary, if Horrigan is to be believed,
"Europe is becoming a very strong market for us," he says. A statement that could perhaps cause a number of market observers to fall clean out of their seats.
"It's gotten so busy in Europe we just couldn't continue to service it from Dubai, so some of my executives broke away to set up the European office," explains Horrigan.
Alternative investment
And it would seem business is unfaltering for a number of boat builders.
"It's largely recession-proof. Looking at orders for mega-yachts in the boatyards, not only has there not been a pulling of orders, new orders have been placed," he says.
It is perhaps not so surprising to see the marina development industry withstanding the downturn in construction and real estate sectors, given many boat owners likely fit into the highest earning income bracket.
However, Horrigan also is keen to emphasize how valuable an investment yachts can be in an unstable global economy,
"I think some of the people who are buying boats are looking to place money in something different to all the fragile parts of the market. There have been so many real scares in traditional parts of the market. I think people who have got the money are thinking, "I'm going to put that US$25m into a boat so I can get some pleasure and joy out of it, rather than put it into X market where I might lose it.
Substantial fluctuations in the value of UAE developers' shares suggest it may not be as immune to the financial crisis as once thought. Shares in Emaar Properties have fallen 65% in the last year, though it rose 15% last week. Perhaps maritime investment will be the safest bet for wary investors.
It has been a lucrative move for Michael Horrigan. Having tied-up with government-owned Nakheel, it is more than likely IGY will be laughing all the way to the bank.
Quick Links(Residental)
Filter by address:
No Comments