By Dylan Bowman
Update: South Korea's Sungwon to build real estate and tourism project as part of $20bn Deira deal.
South Korean construction firm Sungwon is to build a $5 billion real estate and tourism development as part of its contract to redevelop one of Dubai's oldest areas.
The project was officially announced today by His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, during his two-day trip to South Korea.
Sungwon will work on the development with Deira Investment, a private joint stock company established today by Sheikh Mohammad with an initial capital of AED 1 billion ($272.3 million).
In total Sungwon has signed contracts worth $20 billion with Deira Investment, which will see it build houses, shopping malls, public facilities and harbour facilities in Deira, which runs along the city's creek, South Korea's Yonhap News Agency reported.
Richard Lee, a Sungwon vice president in charge of construction in the Middle East, confirmed to ArabianBusiness.com the company had signed a memorandum of understanding (MoU) with Deira Investment Company and would work with it on "various mega-projects".
Lee would not give any further details on the number of projects it would be working on or whether these would be residential or commercial developments.
According to Yonhap, Sungwon plans to form a consortium with up to five other South Korean firms on the project, with construction taking place in three phases and scheduled to finish by 2012.
Sungwon's contract to redevelop Deira follows the signing of a AED 1.5 billion ($408.4 million) deal with Dubai Properties last year to work together on residential, commercial and retail developments.
The South Korean firm has said it plans to invest over $1.2 billion in property development across the Middle East.
Deira is the oldest area of Dubai and lies on the north side of the creek, which separates it from Bur Dubai on the south side.
The area is renowned for its various souks, which have been a prominent feature since the turn of the 20th century, and the water taxis, abras, and dhow sailing boats that criss-cross the creek.
Deira has missed out on much of the redevelopment that has been going on across Dubai in recent years. It is mainly made up of older buildings, but because of this is a popular area to live due to its relatively cheap rents.