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Sat 25 Jul 2009 04:00 AM

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It is rare to find a developer in the current climate that would not look back on the past five years in Dubai with happy memories, and a wish to have its time again. But for Saudi Arabia-based Cayan, which is overseeing a number of projects in the city including Silverene in Dubai Marina, the boom time is now.

Cayan chief development officer Ahmad Kasem. (Khaled Termanini/ITP Images)
The site employs a labour force of around 1250. (Khaled Termanini/ITP Images)
The plot is bordered on two sides by existing developments. (Khaled Termanini/ITP Images)
The shifting staging area has been the biggest challenge during construction. (Khaled Termanini/ITP Images)

It is rare to find a developer in the current climate that would not look back on the past five years in Dubai with happy memories, and a wish to have its time again. But for Saudi Arabia-based Cayan, which is overseeing a number of projects in the city including Silverene in Dubai Marina, the boom time is now.

Cayan chief development officer Ahmad Kasem is sat in his temporary office on the site of the Silverene project in Dubai Marina. A diagram is pinned to the wall over his shoulder, with the progress that has been made on the towers to date highlighted.

Tower A, which when complete will stand at 34 storeys, and Tower B, which will stand at 26 storeys, have both reached the 14th floors to date, and work is continuing at pace.

"The progress that has been made to date is a big accomplishment," Kasem says. This may at first glance appear to be a veiled reference to the financial crisis that has slowed so many projects, while others have ground to a halt altogether.

But regardless of boom or bust, the progress made at Silverene has been impressive - the project only broke ground eight months ago. This is not only a very short period in the total build-time of your average multi-storey twin-tower block, but, as a quick glance at the calendar shows, Cayan virtually broke ground at the same time that the financial crisis decided to rear its ugly head in Dubai.

The main contractor on the US $182 million (AED670 million) project, Arabtec Construction, has ploughed on with construction of both towers, employing around 1250 labourers on site, unhindered by the payment wrangles that have affected other projects. Kasem puts this down to the business model of Cayan which he says remains similar for all of the Saudi Arabia-based developer's projects, regardless of location.

"The minute that a lot of our projects are designed, we sell a large portion of them," Kasem says. "Then, we go after delivery, so the speed hasn't changed at Silverene since we broke ground." Completion is set for October 2010. "I see nothing to stop us meeting our deadline," says Kasem. "Nothing at all."

In the case of Silverene, Cayan began its sales cycle safely before a mortgage in Dubai became rarer than a taxi driver who knows where he's going. But even so, as Kasem explains to us in his office, the firm, which has three projects ongoing in Dubai, takes care not to get its hands tied up in ill-advised development.

"We do a lot of planning," he says. "When we conduct our feasibility studies we make sure that there is a need for a proposed project before we go ahead with it. We could have sold our ongoing Dubai projects in no time."

Some have raised the potential problem of over-supply in Dubai, particularly in the high-end residential sector, as a declining population coupled with the continuation of units being released to the market combine to knock the supply and demand scales out of kilter.

"We need to differentiate in Dubai by location, by asset class, and by segment within the various asset classes," Moody's Corporate Finance Group assistant vice president Martin Kohlhase told CW at last month's Moody's Credit Risk conference.

"From the overall picture, the general comment would be, yes, we are seeing over-supply," he said, "but I'm going to stress ‘generally' because I think it is largely driven by an over-supply in the high-end market."

However, Kasem says that any potential problems regarding over-supply, no matter which market, are negated by Cayan's feasibility study process. Kasem says, if it cannot be proven to be feasible, then it will not happen at all. "Over-supply and lower demand will never stop us from developing our projects because we ensure that there is a need for them," he states.

Sharing the wealth

This year has seen something of an exodus of skilled workers from the Dubai construction industry, and the destination of choice for many has been Saudi Arabia. Last month, Drake and Scull International held an open day in Dubai specifically to find staff to man its Saudi Arabia-based operations, and it is in the process of bidding for a number of contracts in the Kingdom through its contracting arm Gulf Technical Construction Company.

Developers, consultants, contractors and suppliers, large, medium and small have been queuing up for a slice of the KSA pie, with many extending operations into the oil-wealthy country to offset the slowdown elsewhere in the GCC.

Saudi Arabia's economy is driven by wealth garnered through its natural resources. This pool of income is in turn reinvested into commercial and industrial infrastructure, and with such job creation, comes a need for housing.

To cut a long story short, this spells opportunity for the construction industry, but, the Kingdom's riches do not only flow one way. Saudi Arabia-based developers, buoyed by commercial success achieved on home turf, find themselves with the capital to invest in projects elsewhere in the GCC, allowing the whole region to feel the benefit of the Kingdom's burgeoning economy.This may well have been the case at Silverene, and would also go a long way to explaining why Cayan's other projects have been able to progress at a similar pace. A mere 1.5km away is another of Cayan's ongoing projects, Infinity Tower.

The 73-storey residential tower-with-a-twist is also pushing skyward, having reached the 15th floor at the core and the 9th floor of the main structure, with around 1000 workers on site. The third Dubai-based project, the Plaza Residences in Jumeirah Village, is also set to go, with CRC Contracting handling construction.


Arabtec project manager Haitham Razzak is leading CW on a tour of the Silverene site. The project occupies a prime position in Dubai Marina, which was purchased by Cayan from Dubai Marina master developer Emaar Properties some time ago. With the density of multi-storey buildings in the marina, Emaar has staggered start dates for many of its sub-developers to avoid unnecessary congestion on the ground.

Razzak says the marina-side location was a defining factor at the design stage, which was handled by architect and consultant RMJM. "The two buildings hold the marina in between," Razzak says. "It has been designed to maximise the view. Most of the apartments will look directly onto the marina."

Silverene borders the marina waters to the north, Dubai Marina Mall to the east, and has convenient access to the Gulf side of the marina via a road bridge to the west. On the inland side of Silverene lies a different site that is yet to break ground.

The staggering of developments in the marina has contributed to the pace of construction at Silverene, because as Kasem explains, though the 10,200m² plot is extremely large for a residential project in Dubai Marina, the complexity of planning the staging area in a plot bordered by roads, water or other development, was the biggest challenge Silverene has faced to date.

"We really had no place to put the equipment," he says. "We had to manage that around the phasing, so as we finished one area, then we moved the staging area, and so on. We need good stage planning." Had there been ongoing construction sites on three of Silverene's four dry-land borders, things would have been significantly more complicated.

All things considered, the parties involved in the construction of Silverene have to date weathered the storm that hit the Dubai construction industry eight months ago, and progress on the towers shows no sign of slowing. According to Razzak, not a single lost time injury has been reported on site for the duration of the project, a statistic that the Arabtec project manager is understandably proud of.

Despite the plot size and mobile staging area, Kasem says that the straightforward design was a further factor that has contributed to the pace of construction. "For some projects you need additional expertise but we consider this as an easy project," he says.

For this reason, project management is being dealt with in-house by Cayan. "From the way the towers look from a structural standpoint, it's very simple," Kasem adds. "We made it this way so that we can accomplish what we are looking for very fast."

Despite the growing pains being experienced by many across the industry at present, speed remains of the essence at Silverene. Be it a sturdy financial base in an oil-rich economy, a testimony to good and careful planning or something as straightforward as simplified design, Silverene is on course for October 2010. And whoever is responsible for updating the progress chart pinned to the wall of Kasem's temporary office, has their work cut out for the coming months.

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