By Shane McGinley
Mega-resort in talks to scale back design, says CEO of Dubai Properties Group
Dubailand, the multibillion-dollar real estate project backed by Dubai Properties Group, is in talks with developers to review their contracts under a wider restructuring plan that aims to get the project back on track by the year-end.
The mega-project was one of the most ambitious entertainment resorts planned for Dubai but was placed on hold in 2008 after the credit crunch saw the emirate’s real estate market collapse.
The development, which was originally slated to be twice the size of Walt Disney World Resort and boasted tie-ups with Universal Studios and Legoland, may be scaled back to bring the project in line with new economic realities.
“Dubailand is currently in the process of evaluating new projects,” said Khalid Al Malik, CEO of Dubai Properties Group, at the 4th Arabian Business Forum on Monday.
“We are renegotiating the terms of the contracts and the other issue is the size of these projects – so we’re reviewing the contracts to make it easier for investors.”
Dubai had the world’s fastest- growing property market from 2006 to mid-2008 because of rising demand from a growing expatriate workforce and speculation fuelled by borrowing.
Prices quadrupled in the six years following the 2002 decision to allow foreign ownership of property in designated areas.
The global financial crisis sparked the collapse of the emirate’s property sector, wiping more than 60 percent off house prices and sending speculators fleeing from the market.
About 50 percent of Dubai real-estate projects were cancelled or suspended after the collapse.
Launched at the height of Dubai’s real estate bubble, Dubailand was reported to be AED335bn at its peak. The project involved dozens of developers and sub-developers and was to feature seven themed areas, residential developments and what was planned to be the world’s largest shopping centre in Mall of Arabia.
Al Malik said DPG planned to unveil a revised masterplan for the mega-project later this year.
“You will hear good news [soon]," he said. “We will have something to announce [in terms of the revised masterplan] this year.”
Dubai developer Diamond said in April it planned to build 2,500 townhouses in the entertainment complex by 2016.
Are they really serious as in restart another massive wave of property building to add to what every real estate analyst in the UAE refers to as, even in a conservative fashion, significant oversupply.
I thought RERA was looking to cancel 500 projects rather than revive an equal number by the year end at Dubailand. Also presumably the newly appointed Dubai Urban Planning Committee should have some cautionary input into this process. Who is going to even consider buying the properties resulting from this project revival, given the rock bottom investor confidence in legal protection of their interests and the thousands of disappointed investors looking for their money back?
Are there two different schools of policy at work here, on the one hand we're saying rationalise the viability and planning of the property pipeline pumping oversupply and on the other we're suddenly going full steam ahead with large villa and other projects as well as reinstating Dubailand? Bewildering strategy.
This is indeed a good news. These projects can generate mass tourism and generate large opportunities for Employment. Cities Like Falcon City , Universal Studios, Legoland and City Of Arabia generated lot of interests world wide, to look at Dubailand as Major hub of Middle East Tourism.
Hope This time authorities would really push for its fast completion and re generate the enthusiasm that it lost in 2008.
DubaiLand needs to shrink to its square root size - full stop.
This is indeed is great news for Dubai and its tourism industry. However, the project should be purely entertainment only minus the real estate component given the current massive real estate oversupply in the market. Dubailland is an integral part of Dubai's vision to sustain and grow its tourism industry. Dubai needs to continue to add new attractions if it is serious to maintain its position amongst the top touristic destinations. This project also bodes well with Emirates plan to become the busiest international airport in the world by 2020 as Dubailand is expected to attract millions of people each year. The decision to scale back the project under renegotiated terms is a wise one as the initial launched project was over ambitious and does not sit well with the current market situation
They are not talking about property. Entertainment and leisure projects is what is talked here. Tourism is fairing very well here especially stop over traffic thanks to Emirates. So it all makes sense to restart these projects which would give more to do and see for visitors.
brave are the souls who will tread where no man, no woman dare go!!Good luck!!!
Why does everything have to be the biggest in the world in Dubai
chill guys...this is just another PR exercise...nothing is coming back on track for few years now....
@MM, I quote from the article "Dubai developer Diamond said in April it planned to build 2,500 townhouses in the entertainment complex by 2016"
So it seems they are confirming more properties.
The economic downturn and over supply of real estate is not related to the need for quality family entertainment. If a Universal Studios, Six Flags, Sea World or similar type of entertainment/theme park is built it should do well if run correctly. The challenge may be the hot summer months and how the venue would attract business if customers must walk around outside in the heat. If there is a solution then there is no reason a world class entertainment/theme park cannot be a successful year round operation. Let's remember thay any project which starts construction today would probably take 2 or 3 years to complete, even a project like Mall of Arabia which is partially built. The second thing to remember and this one is important.....as Abu Dhabi continues to grow and build projects of its own like the Louvre, Guggenheim, Yas Island Mall, etc. it's possible in 2 or 3 years Abu Dhabi starts taking some of Dubai's tourism. Dubai must continue to evolve to keep and attract new tourists.