Topping the list was the Dubai-based Fortune Group’s $1.1bn commitment to building the 108-storey Burj Al Alam in the Business Bay district, with 27 floors of serviced apartments, commercial offices and the world’s highest hotel. Rising 480 metres, the Burj Al Alam is designed to resemble a dazzling crystal flower.
The City of Arabia also launched its Wadi Residences, 1,600 apartments in five-storey buildings at the heart of its city-within-a-city, plus dinosaur park and the world’s biggest shopping mall. Meanwhile Dubai-based Al Manal unveiled its $816m Crown City residential project with 8,000 apartments in 52 buildings in the Dubai Investment Park.
Emaar Properties released the last of its popular Alvorado villas at the Arabian Ranches around its golf club, and also reported rapid sales of its first offering within The Old Town Island at the Burj Dubai Downtown, The Tajer Residences comprising 252 individually designed waterfront apartments.
Aside from the $1.1bn Burj Al Alam, there were four other major project announcements at the upcoming commercial district Business Bay: Tulip announced its Peninsula Tower, while Al Attar Properties launched The Skyscraper, Tameer rolled out The Regal Tower, and leading Korean firm Bando Housing Corporation bought land for a $350m mixed use development.
New Dubai also saw some major new development projects: the $323m Taj Exotica Resort and Spa and The Grandeur Residences on The Palm Jumeirah from ETA Star; the $191m Palm Island hotels from Zabeel Investments and TUI Hotels and Resorts; and the Iris Blue, a 29-storey residential tower in Dubai Marina from Sheth Group of India.
Largest Dubai building project
Had all these diverse companies got the Dubai property market wrong? AME Info concluded, ‘Perhaps if these companies were mainly international and not Dubai-based this might be a fair conclusion.
‘But the majority are local concerns, generally run by local businessmen with a good track record, and usually self-made, not the usual candidates for throwing money away. However, one thing that is quite certain is that the Dubai Property Law has revived the launch of new development projects in Dubai.’
Then in April 2006 the Dubai Government trumped all these announcements with the $18bn The Lagoons project. At 70 million square feet The Lagoons is the largest Dubai project of the 21st century so far. It will comprise seven landscaped islands, linked by bridges, with residential buildings, shopping centres, office buildings and marinas.
Meanwhile, Colliers International published an Office Market Overview for the Gulf region which highlighted a doubling of Dubai office rentals since 2002, and the fact that 40 per cent of current tenants were tentatively looking to increase their office space. The conclusion was that the office market would remain tight until mid-2007.
However, Colliers also noted that the present 14 million square feet of office space in Dubai will more than double to 28.7 million square feet by the end of 2008, and that there is a substantial amount of new build office space in the pipeline to come after that, such as the Business Bay office towers and now additional space in The Lagoons.
Final price spike?
This correspondent had started to feel that the game was almost up for Dubai property. But in August 2006 we published a final article on the boom which predicted a final price spike in September.
We argued: ‘In terms of rental yields Dubai property offers one of the best returns available in global property at present. Dubai rents have rocketed due to a shortage of completed property, and so the return for landlords is high.
‘This factor alone ought to guarantee at least one more upward movement in prices before the inevitable correction – perhaps as new supply kicks in later on next year. In short, market forces should push house prices sharply higher to produce falling rental yields.’
In fact this final spike forecast proved spot on, and in the autumn Standard Chartered Bank unveiled its new house price index which showed that prices had indeed spiked in September.
A Short History of Dubai Property: Part 5
A Short History of Dubai Property: Part 4
A Short History of Dubai Property: Part 3
A Short History of Dubai Property: Part 2
A Short History of Dubai Property: Part 1