By Ed Attwood
Although not as subdued as recent years Cityscape Global was still hampered by mixed predictions for the Dubai property market
There wasn’t much in the way of queues this year at Cityscape, but there was certainly more in terms of key announcements and project awards than we have seen in the years since 2008.
First up was Meydan, the master developer that has built out its plans in a slower and more sustainable method than most. The firm said that it was developing two more stages in its Meydan City masterplan, adding Hadaeq Sheikh Mohammed Bin Rashid and Meydan Tower to its mix. The former is a vast housing scheme - featuring “English, French and Japanese-style gardens”, plus an extensive network of canals and waterways — based in Nad Al Sheba. The latter is a 72-storey tower that is based outside its normal sphere of operations.
Also in Meydan’s stable is Meydan Sobha City, a project that will be developed in conjunction with India’s Sobha Group. That site, which will be built alongside Al Khail Road, will feature 280 villas, thirteen high-rises, entertainment, retail complex and schools and is spread across 743,000 square metres (sq m). It will be the largest project to be launched in Dubai in the last four years.
The other big Dubai-based announcement came from Dubailand’s Falconcity of Wonders, the long-delayed project that runs alongside Emirates Road. Announced over seven years ago, Falconcity has been a regular attendee at Cityscape events both in Dubai and Abu Dhabi, but has not had much to shout about. This time, however, the developer announced that ‘Land of India Taj Arabia’, the city’s first monument replica, will be completed by the end of 2014, worth a cool $1bn. Set to be themed as the “New City of Love”, the developers behind Falconcity said it has already attracted interest from Bollywood.
The zone will feature a copy of India’s Taj Mahal, while other zones in the city will include replicas of the Eiffel Tower, the Leaning Tower of Pisa, the Great Pyramid and the Hanging Gardens of Babylon.
Meanwhile, executives from Dubai World Central, the mega-development that plays host to what will be the biggest airport on the planet, also said that the $33bn-odd project was taking shape. Chief operating officer Rashid Bu Qara’a said that his company was planning to develop Al Maktoum International Airport as a private jet hub while the facility waits for commercial traffic to make its way over from Dubai International Airport at some point from 2020 onwards. Bu Qara’a revealed that construction on the hub began five months ago, and is likely to be completed within five months.
Outside Dubai, developer Emaar confirmed it would build an $820m retail project in Cairo with the Al Futtaim Group. Both firms said that Cairo Gate will be a major lifestyle and entertainment development on 160 acres of land alongside the Cairo-Alexandria highway.
The first phase of the project will include a mall with a gross leasable area of 120,000 sq m. It will feature Al Futtaim Retail brands including IKEA, Marks & Spencer and Toys ‘R’ Us, as well as dining and leisure facilities and an office park. The developers say that they expect Cairo Gate to have a catchment area of approximately 6 million people. However, no indication was given on when the development was expected to be completed.
In other news, executives from Aldar and Sorouh hinted that their merger is nearing completion. Given the number of developers plying their trade in Dubai, it’s somewhat surprising that the same trend is happening in Abu Dhabi’s next-door neighbour. For those companies that weren’t making significant project announcements, it was all about talking up the market.
So how is the market actually faring? While a report in April by real estate firm Cluttons said the total office supply in Dubai is expected to rise to 70 million square feet by the end of 2012, with vacancy levels set to exceed 40 percent, Nick Maclean, the managing director in the Middle East for rival firm CB Richard Ellis (CBRE) said this was not the whole picture.
“There are some interesting things happening… The headline numbers in terms of vacancies are not the true picture in terms of what is going on at the moment,” he claimed. “We specialise in the commercial market. We have seen in the first seven months the same level of take up in the whole of 2011, which is as least as good as 2007. There is quite a lot of activity at the moment,” he claimed.
The majority of the demand was coming from the oil and gas and the corporate sectors, “which have had their reins released to come and look for new markets,” he observed.
“It is the not just people upgrading… We have got people effectively expanding their businesses, not just relocating. Business sentiment in Dubai is strong and there is demand… It hasn’t been this strong for some time,” he claimed.
However, while the prices of premium properties in Dubai may be looking healthier than they have done for years, the case is not the same for those areas with less infrastructure and poorer locations. With significant supply still to come onto the market as developers attempt to clear their backlogs, further price falls in less-attractive areas certainly cannot be ruled out.
Pools of profit
Crystal Lagoons, the US-based company behind the world’s largest man-made lagoon, expects to announce up to $3bn worth of deals in the GCC in the next few months, its CEO told Arabian Business.
The firm said it is in talks with developers and investors in Saudi Arabia, Oman, Kuwait, Dubai and Abu Dhabi and plans to open two new regional offices in Cairo and the UAE to cater to the demand.
“We are now negotiating deals in Saudi Arabia, Oman [and] we’re doing deals in Dubai, Abu Dhabi and Kuwait,” said Kevin P Morgan.
“In the next couple of months we hope to announce a handful of new deals in the region. The value of the deals we’re talking in aggregate of upwards of $2.5-$3bn of new developments,” he added.
Crystal Lagoons said it is currently filling its 120,000 sq m lagoon in Egypt’s Sharm El Sheikh, which is set to be recognised by the Guinness World Records as the world’s largest.
The lagoon will officially launch on 8 November, said Morgan.
“Our second Sharm El Shaikh project will be the centrepiece of a new $600m luxury resort being developed by leading Egyptian tourism company Radamis for Hotels & Touristic Resorts. Aimed at the high-end traveller, the resort covers 75 hectares with 2,500 rooms across three separate hotels and 2.7 hectare lagoon offering an unlimited selection of water sports,” Morgan said in a statement last month.
Part of a mixed-use project developed in partnership with Egypt’s Golden Pyramid Group, Citystars Sharm El Shaikh will feature a series of ten saltwater lagoons, covering a combined area of 100 hectares and including the world’s largest lagoon, to create a unique desert oasis and new tourism landmark for the region.
The development will also include 1.2 million square metres of residential units, hotels, golf courses, marinas, a museum and a commercial centre.