Wednesday, October 24 09:33:54
Dubai proclaimed its real estate comeback in the only style it knows: grandiose. A replica of the Taj Mahal about four times bigger than the original, a skyscraper with nine swimming pools and a mile-long canal winding its way around office buildings are among the high-profile projects unveiled in the past few weeks. The plans had been on hold since the financial crisis brought the emirate's property boom to a halt in 2008. The eye-catching developments may be creating a buzz. In reality, the nascent recovery has been limited to a few areas of Dubai, which suffered a slump that caused property values across the emirate to fall by as much as 65 percent. About a quarter of Dubai's residential properties are empty and an additional 25,000 are due to be completed next year as developers fulfill contracts awarded before the crash, Jones Lang LaSalle Inc. estimates.
"The market has improved to some extent, but there isn't enough to justify going ahead with all the projects that are now being talked about," said Craig Plumb, head of research for the Middle East at the Chicago-based property broker. "They should be phased over a longer period and should be built in line with demand." About a third of the office space in Dubai's central business district is unoccupied and the vacancy rate is much higher in other neighborhoods, Jones Lang said. About 900,000 square meters (9.7 million square feet) will be added in 2013, according to the firm. That's 13 percent of the existing space.
Some of the developments announced earlier this month at Cityscape Global, Dubai's biggest annual property conference, were reminiscent of pre-crash projects like Burj Khalifa, the world's tallest tower, and an indoor ski slope at the Mall of the Emirates. Meydan City Corp., the company that built Dubai's 60,000- seat horseracing stadium and hotel complex, said at Cityscape that it will revive a plan to create a development featuring lagoons, canals and parks as well as a skyscraper with pools and "sky gardens." The government also approved the construction of a canal that would connect the Business Bay area to the sea. The Taj Arabia complex, based on India's 17th-century Taj Mahal mausoleum, will be built by Link Global Ltd. for about 1.3 billion dirhams ($350 million), the Dubai-based company said at the three-day trade fair. Chairman Arun Mehra declined to say how Link Global will finance the construction of the Taj Arabia, which will include a 300-room luxury hotel.
As those projects get a new lease of life, many more sit abandoned in the desert or in the Persian Gulf according to Bloomberg. Taj Arabia was designed to be part of the Falconcity of Wonders, a 41 million-square-foot complex of homes, offices, hotels and stores along the Emirates Ring Road that links Dubai to the United Arab Emirates' six other sheikdoms. That project, featuring attractions including replicas of the Pyramids, the Great Wall of China, the Eiffel tower and the leaning tower of Pisa, was derailed by the collapse of the real estate market.