By Shane McGinley
Moves to reshape troubled real estate project as travel hotspot could attract fresh interest
The first island on Nakheel’s The World is on track to open
by the year-end, in a move that may signal a potential new direction for the
troubled offshore project.
The luxury beach club on the island of Lebanon has already attracted
the interest of travel agents and tourists keen to book events on the man-made
island, said operations manager Reza Sinnen.
“We’re the first commercial development on The World,” he
said. “We’ve already had an enquiry from one individual who wanted to book the
island for December 31.
“We want to run weekend events with promoters.”
The project includes a 100-seat restaurant, cabanas, a
lounge area and entertainment facilities, and is owned by Indian entrepreneur
Wakil Admed Azmi, who bought the island in 2008.
Membership to the beach club could cost up to AED40,000 a
year and – with a pontoon that can accommodate up to 80ft yachts – the company
is keen to tap the lucrative yachting community.
The success of the club’s launch could be a bellwether for developer
Nakheel’s own plans to resuscitate the offshore project by launching tourist
trips to the islands.
The developer, which is restructuring some AED59bn ($16.1bn)
of liabilities, is in early talks with a company to offer day tours for visitors
from Palm Jumeirah out to the islands.
“We are trying to
develop a new tour and cruising business to The World islands from Palm
Jumeirah, we see a lot of demand for tour agencies for such things,” Nakheel chairman
Ali Rashid Lootah said in August. “We
have a lot of people who come to Dubai for short stays and people asked us to
develop that… for some packages for short-term tourism.”
The islands could prove a hit among wealthy locals and
tourists eager to secure a unique hideaway for events, said Basel Abu Alrub,
managing partner at Dubai-based agency U Travel. “It will generate interest for private
functions that are high-end and are unique,” he told Arabian Business. “I had a
recent inquiry from a wealthy Indian family looking to book an island for use
for a 60th birthday party.”
Alrub said operators would need to be “travel agent-friendly”
and offer incentives and discounts in order to make it viable for travel
companies to promote the islands profitably. If they do, he said it would be
“very interesting” to potential clients.
Announced at the height of Dubai’s real estate bubble, Nakheel’s
‘The World’ epitomised the city’s boom-time ambition but quickly ran aground in
the wake of the global financial crisis.
Construction on the offshore project ground to a virtual
standstill in the wake of the downturn, which saw real estate prices in Dubai
fall more than 60 percent from their peak.
Almost all buyers on the project have failed to begin
construction, with Lebanon’s World Island Beach Club the only island where
active work is ongoing. Nakheel is embroiled in more than 10 lawsuits relating
to the islands.
Nakheel has claimed a number of buyers are in default, while
a source told Arabian Business in July the developer had changed
terms on payment schedules previously agreed with buyers of islands to
fast-track the collection of fees.
The new demands were allegedly issued after a revamp of
Nakheel’s chairman and board in March 2010, as the developer sought to
restructure millions of dollars of debt.
Nakheel has said 70 percent of the 300 manmade islands are
sold and that building work is the responsibility of the owners.
Any attempt to reshape the project as a tourism destination
would be hindered by the cost of construction and of transporting supplies to
the islands, said Matthew Green, head of research at real estate consultancy
“Developers will have issues making it feasible,” he said. “[Tourism
projects] will generate a lot of interest but people will take a wait-and-see
approach and see if they can be successful.
â€œWe are trying to develop a new tour and cruising business to The World islands from Palm Jumeirah, we see a lot of demand for tour agencies for such things,â€ Nakheel chairman Ali Rashid Lootah said in August.
And see what? Just look at the picture, sand and more sand.
It is a shame that Nakheel has taken so long to allow The World to be used in this way. People I know proposed something like this over 4 years ago; all they wanted was a right-of-use for a year at a time but they met with a stone wall. And what about the Palm Jebel-Ali?
Yes, but is "compacted sand"