A helicopter was provided at last month’s Arabian Travel Market to get a full appreciation of Nakheel’s projects, which, as Manal Shaheen explains, still have a lot of surprises to offer.
What stage are the hotel developments at? Have all the projects been announced?
At the moment we have 30 hotels on The Palm Jumeirah, both on the trunk on the left hand side and the crescent. The majority of them [around 20] have been announced, and the rest could be announced at any time. For the rest, they have not been announced, not because they don't have hotel management agreements, but they would like to announce it when they are finished or when they are about to finish - they all have different marketing strategies.
We know about all of them, and their management contracts, but we are giving them the freedom to announce them whenever they want to. There have already been plenty announced: Atlantis, the City of Sheba, Fairmont, the W Hotels, Trump. But I would say all of them have started construction, and they are at different stages. The first hotel that will open will be Atlantis at the end of 2008, the rest will start opening in 2009, and I would say all the hotels will be open by 2010 or 2011. This is the timeline we have.
Talking about how the construction has been going, there are a lot of rumours about the lack of water supply and electricity supply. What is the actual situation?
The whole island is structured differently. Whatever is happening on the trunk is not the same as what is happening on the fronds, or the crescent. The infrastructure has already been put in place. For the villas on the fronds, the electricity and the water is connected normally, and you get your bill from DEWA [Dubai Electricity and Water Authority] like you are in a normal house. The trunk is different, because it is a combination of hotels and residential, and it is mixed-use.
The crescent is purely for the hotels, and it is a very technical engineering solution that they are using, but it is all based on the infrastructure that has been provided for the entire island. But there is no problem with that, because it was provided from day one and was planned for when we designed the island. We always knew there were going to be hotels on the crescent. We do have divisions that act like other government authorities - for example we have a design group that takes care of the infrastructure which has a great partnership with DEWA, the RTA [Road Transport Authority] and Dubai Municipality. So we are making sure that we are providing all these services so people will not know the difference.
People didn't know about [how it would work] before they came there - [but] that is normal, because it has never been done before.
To give you an example [of what the issue might be], we designed the plots and worked out that for a particular one it was going to be built up [as a hotel] and it would have 300 rooms. Now the developers want the best out of this plot, so you give them 300 and they want 500 keys. But you can't provide that, because the infrastructure that has been provided is the same that was there when The Palm was designed. You can't just increase the utilities there because you want to, because it was not designed that way, and we have sold the plot based on that capacity. When you are the developer of a hotel or the developer of any other buildings, they know the guidelines, and they have to stick to them.
Moving away from The Palm for a moment, what other hotel developments are in the pipeline for Nakheel?
We wanted to do a calculation for the Arabian Travel Market about what the expectations were, and it was really hard, because we were looking at it thinking ‘Oh my god, is it really all this?'. If you look at a map of Nakheel projects, The Palm [Jumeirah] is the smallest waterfront development that we have - it already has 30 beachfront hotels, and with that number we are doubling the number of beachfront hotels in Dubai.
When you are talking about a development like The World, which is all about resorts and hotels and destinations, it is difficult for us to calculate what we are going to have. There are great developments planned for The World, which are more like resorts.
Palm Deira, we haven't really even started selling these. And we do have a lot of sites for hotels, for mixed-use developments, furnished apartments. We haven't really started selling these. And Palm Jebel Ali, we have only really done the fronds. And if you look at the size of the developments, Palm Jebel Ali is 50% bigger than Palm Jumeirah, and Palm Jumeirah has 30 hotels. So add another 50%, and you could take that number [as an estimate].
What we are looking at is creating these waterfronts as different destinations. So we will not hesitate to go to hotel operators to create something special on these islands. We are always looking for new stuff.
We have three Palms, but they provide different opportunities. They are all combinations of three sections, which is the trunk, fronds and crescent, but they are all different configurations in the final designs. So as far as hotels go, there are all these different opportunities available.
On the Palm Jumeirah we first offered the villas, then we offered the apartments, then we offered hotels. For Palm Jebel Ali we will do the same. The World we are already offering for hotels, but people still haven't announced their hotel management contracts and we will leave it up to them to do that.
Then we have a joint venture with Bharat Hotels [to build a 234-room hotel overlooking Jebel Ali]. We do have a lot of waterfront projects, but each of our developments contains different opportunities for developments.
On the land based side, what opportunities are available for hotel investors and developers?
We haven't announced any other hotels on our land-based projects yet. But we have other communities on land where we will also provide a lot of hotels, because the nature of these projects - for example Jumeirah Village with around 600 to 800 plots, which are a mixture of commercial and residential - all of these are going to provide different businesses. If you have a thousand people living in one place, you are going to want a business hotel and furnished apartments.
Roughly, I would say the number of hotels on our land-based projects will be 10% of the total number of hotels [being developed]. The land is serving the communities, and the hotels there are going to be business hotels - your three- and four-star hotels. If you select any hotel anywhere in the world, the first one you would select is one near the beach, so we are concentrating on our waterfront projects. We are focussed more on the water than on the land.
When are we going to find out the final details of what hotels and developments will be part of Nakheel's projects?
For Palm Jumeirah, by the end of next year you will know everything about it, and all the hotels that will be built there. Palm Jebel Ali, towards the end of this year you will start finding out about developments planned there. Palm Deira, from next year you will start to find out about it, but only in portions starting with Deira island, because it is a huge development. And The World you will find out any time from now, we are in the process of announcing them.