Michael Horrigan, chief executive of Island Global Yachting on the firm's recent tie-up with Nakheel.
Dubai is the mega-yacht capital of the world. To meet that demand, luxury marina developer and manager Island Global Yachting (IGY), through its partnership with Dubai property giant Nakheel, recently unveiled plans for a 75 berth mega-yacht marina on the Palm Jumeirah, which will be able to accommodate boats up to 165 metres in length.
How important has the 2005 tie-up with Nakheel been to your success in the Middle East?
Very important. The Nakheel corporate goals are very much harmonious with IGY goals for an integrated lifestyle development. Nakheel are keen to maintain high environmental standards, they are very community orientated and think a great deal about their residents and what they need in terms of security and access. So our marinas within a Nakheel environment really steps up our corporate strategy by a few notches.
Dubai owns the greatest percentage of mega-yachts in the world. 100 of the world’s largest yachts are located in Dubai.
Are you confident you are going to sell all the berths at Anchor Marina on the Palm Jumeirah?
The demand is overpowering. We are probably triple subscribed for what we can bring to the market, so for every one berth we have available, there are three or four people who would like one. We see this as continuing.
Palm Jumeirah will have about 3000 berths, and I'm sure we could provide double that number for the residents on the Palm and the demand would still be there. The same also applies to the Palms Jebel Ali and Deira, although there will be a higher number of berths at Jebel Ali.
We have a commitment from Nakheel to provide 20,000 berths over the next five to 10 years in Dubai and we are confident that the demand won't flag.
How does the Dubai Festival City Marina, which opened last summer, differ from the Anchor Marina project?
Being a creek marina, as opposed to a sea front or coastal marina, it's a different market. The creek demand is good but the coastal demand is greater. The actual marina is quite dramatic with Festival City Mall in the background and the hotels adjacent to it.
It's about the same price as Anchor marina, it's smaller, and is limited by the bridges they are building across Dubai Creek. While they are under construction, you only have limited time when you can travel out of the creek to the sea. This creates a different market.
How much do you think your recent growth in the Middle East is down to the boom in the leisure sector and the building of these artificial islands?
In Dubai, it has been critical. A market like Abu Dhabi is a more entrenched cruising market because it has a lot of islands and a bigger coastal area, but Dubai's boating market is increasing, as more berths and more waterfront destinations open up.
I think people visualise cruising as getting in your boat and going out to sea and sitting there. People tend to want to go somewhere, so as the destinations increase along the coast of Dubai, a cruising culture will develop. People come to Dubai for the climate, particularly in the winter, and for the fact they can own a waterfront property with a berth.
Who are your clients? Are they all Middle Eastern?
In the Dubai market, the people buying the larger mega-yachts are mainly Middle Eastern. It is important to remember that Dubai owns the greatest percentage of mega-yachts in the world, which range from 40 metres to 80 metres.
100 of the world's largest yachts are located in Dubai and the average boat size in the Middle East is larger than in America or Europe. As a result, we are building a big mega-yacht marina at Palm Jumeirah, which will be ready by 2009. We are starting construction this year, berthing will be possible next year, and the clubhouse will be ready by 2010.
Do you think the recent turmoil in the markets and global economic slowdown will affect consumer spending here in the Gulf?
We are finding that in all of our markets, we are largely insulated from what is happening in the financial markets. There has been no pull back in the orders placed. We monitor the size and type of the boats being manufactured - because that is our future market - and there have been no cancellations. It's our user group demographic so we track it very closely and there are still orders pouring in.