Dubai’s Jumeirah Central project will cost AED73.4 billion (almost $20 billion) – and no deadline has been set for its completion.
The urban mixed-use city district is to be built on the site previously reserved for the Mall of the World, off Sheikh Zayed Road.
It will comprise 9 million sq ft of retail space including three malls, 4.5 million sq ft of outdoor shopping space and supported by more than 44,000 car parking spaces. It is to include 2,800 hotel rooms and 3,000 apartments.
The first phase of the project, announced by Sheikh Mohammed, Vice President and Prime Minister of the UAE and Ruler of Dubai, is estimated to cost AED24 billion ($6.5 billion). Officials said the project would be given no specific deadline and financing arrangements had not been finalised.
"We are in extensive discussions with all the usual prospects [to build the district]," said Jumeirah Central's chief operating officer Morgan Parker.
Jumeirah Central will be located on land that was previously earmarked for the giant Mall of the World, which was to include 745,000 sq m of shopping space connected to a theme park and 100 hotels.
That project was announced in mid-2014, just as oil prices began falling sharply. Last week, Dubai Holding said it had decided to relocate Mall of the World, but officials declined to answer questions about the fate of that project.
Although Dubai's economy is coping better than its neighbours with cheap oil, thanks to the emirate's tourist and business services sectors, real estate prices have been dropping since last year and some residential and retail projects have been suspended or cancelled.
Mohammad Kamal, a research analyst at Dubai-based Arqaam Capital, said that while Jumeirah Central could provide new business for construction companies in the region, they were struggling with difficult conditions in the industry.
"Overdue receivables linked to suspended or cancelled projects remain prone to write-down risk, and cash flows remain weak in a historical context," he said.
"Though incoming projects can help revitalise growth across the sector, working capital and leverage remain problematic. The ability to execute on new contracts is generally constrained as a result."
With inputs from Reuters
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