Dubai continues to press ahead with its ambitions and with only four years to the Expo 2020, the construction sector can look forward to the release of multi-billion-dollar projects, says MRIDULA BHATTACHARYA.

By 2020, the emirate hopes to attract 20 million visitors per year and in line with these ambitions, Dubai continues to expand its hospitality infrastructure – with over 43,700 rooms currently in the pipeline – shopping malls, luxury residential space, as well as transportation and utility services.

These and other projects in the run-up to the world-class event, along with key government-backed developments and real estate projects, will keep the construction sector buoyant despite a wider slowdown in economic growth.

According to a recent report, the total value of projects under construction in the UAE emirate is $53.6 billion, with a further $337.2 billion in the planning stage.

“These are significant amounts of investment for most mature economies, but for an emerging market such as Dubai, they are extraordinary figures which provide evidence of the emirate’s increasingly diversified economy,” said the report titled ‘The Dubai Construction Pulse’, by Deloitte and Meed Projects.

It further said the total quantum of current or planned development within the residential sector was estimated to be $66.4 billion, while the total development activity within the hospitality and leisure sector was estimated at $21.2 billion, including projects in the execution and planning stages. For the retail sector, the total value of development is estimated to be $15.33 billion. It further noted the construction activity within the commercial sector is estimated to be worth $9.1 billion with additional projects to be announced during 2016 in prime locations such as Dubai International Financial Centre (DIFC) where there remains a strong demand.

Despite regional security concerns and wider macro-economic turbulence, Dubai has continued to award significant projects in Q1 2016, including the $840-million second phase of the Atlantis Hotel on The Palm Jumeirah, Nakheel’s $380-million Palm Gateway Towers, the $370-million ICD Brookfield Place and wasl’s $190-million Mandarin Oriental Hotel, it added.

According to another report by JLL, a leading real estate investment and advisory firm, the construction sector is headed for another tough year with the number of new contracts likely to end up lower than in 2015.

Alan Robertson, CEO, JLL Mena, said: “2016 is expected to see more challenging conditions in the real estate market as we begin to feel the impact of the continuing fall in oil prices and ongoing geopolitical tensions leading to reduced liquidity, and pressure on government budgets.”

He, however, pointed out that the “UAE’s real estate market is now better equipped to deal with such challenges than it has
ever been”.

With subsidy cuts, reduced spending and the potential introduction of a Goods and Services Tax (GST), the government is already realigning its strategy to further reduce its reliance on oil revenues.

In general, the overall economy is still expected to grow at around 2.7 per cent, the report noted.

Landmark projects

Despite the challenges, Dubai continues to invest into large infrastructure projects and those related to the Expo 2020.

Last month, leading global architects BIG (Bjarke Ingels Group) of Denmark, and Foster + Partners and Grimshaw Architects, both of the UK, were announced winners of the Dubai Expo 2020 theme pavilion design competition. The three pavilions will form centrepieces of the 2-sq-km Expo site, surrounding the central Al Wasl meeting plaza, the figurative and literal heart of Expo 2020 (see UAE Focus).

Another major announcement was the launch of the world’s largest wholesale city covering 500 million sq ft at an estimated cost of Dh30 billion ($8.16 billion). The one-stop free zone boasts specialised integrated trading parks and an international trade exhibition facility (see Real Estate feature).

Meanwhile, Dubai is poised to see the completion of a number of projects targeted at the tourism and leisure sector – among the most striking of which are the Dubai Opera and Dubai Parks and Resorts.

The new 2,000-seat Dubai Opera, located near the Burj Khalifa in The Opera District development in Downtown Dubai, is expected to serve as the cultural epicentre of all things arts, film and music. Under construction by master developer Emaar, the iconic project is inspired by the maritime traditions of Dubai and is styled on the traditional wooden dhows that are synonymous with the world-famous Dubai Creek.

Dubai Parks and Resorts – the emirate’s first major theme park – is expected to prove a significant draw when it opens for business later this year. The estimated $2.86-billion integrated theme resort will offer a variety of attractions in Motiongate Dubai, a Hollywood movie-inspired theme park; Bollywood Parks Dubai; as well as Legoland Dubai and Legoland Water Park, the region’s first water park catering to families with children.

Other theme parks opening this year include the IMG Worlds of Adventure, which is owned by IMG Theme Park. Spread over 1.5 million sq ft, it is designed to be the largest indoor theme park in the world.

Dubai Safari Park, a 119-hectare zoo, is also expected to open by mid-2016. The $40.8-million development will house close to 1,000 animals, with more than 350 species of rare and endangered animals.

Dubai Frame, a Dubai Municipality project, is scheduled for completion this year. It comprises a 150-m-high, 93-m-wide structure being built to resemble a huge picture frame, through which landmarks representing modern Dubai such as Emirates Towers and Burj Khalifa can be seen on one side, while older parts of the city such as Deira and Karama can be viewed on the other side.

Other key attractions include the Dh6-billion ($1.6 billion) Bluewaters Island featuring the world’s tallest Ferris wheel, which is under construction. Besides, the Ferris wheel, the project will have retail, residential, hospitality and entertainment zones. It will also house a boutique five-star hotel and offer residential options.

Work on Aladdin City, inspired by the tales of Aladdin and Sindbad, will commence in the fourth quarter of this year for completion by 2018-end. The project will include three towers comprising commercial and hotel space spread over a span of 450 m on Dubai Creek.

Other projects that are set to enhance Dubai’s status on both a regional and global level include The Sustainability City (see separate article) and Dubai Design District (d3), the emirate’s hub for designers. The second phase of the d3 – the Creative Community – is expected to be complete in mid-2018. Work on the third phase is expected to start in 2017 and be completed in 2021.

The Al Habtoor City ... massive in scale.

Real estate

In line with Dubai’s penchant for the iconic and the awe-inspiring, the emirate will continue to see the rise of the some of the most striking landmarks in the next few years. For instance, Emaar Properties and Dubai Holding have commenced work on the Dubai Creek Harbour project, which includes the world’s tallest twin towers.

The development, which is three times the size of Downtown Dubai, is located alongside Dubai Creek and adjacent to Ras Al Khor. It will comprise 3,664 office units, 8 million sq ft of retail space, 39,000 residential units and 22 hotels with 4,400 rooms.

A highlight of this development is an observation tower combining Islamic and modern architecture, which is linked to the central island district of Dubai Creek Harbour with a vibrant 4.5-km-long boardwalk.

Emaar is also working with the Dubai Municipality to build the Al Mamzar beachfront project at an initial cost of Dh10 billion ($2.72 billion). The project, which stretches over 9 million sq ft, will have 4,000 residential units, 300 hotel rooms, 250,000 sq m of retail amenities and 3.5 km of walking tracks.

Emaar is also developing The Address Residences Dubai Opera, which consists of two towers – a 65-storey residential tower and a 55-storey hotel/serviced apartment tower. The towers have a completion date of 2020, according to reports.

Damac Properties, another major player,   has launched Aykon City, a massive six-tower luxury project on Sheikh Zayed Road overlooking the Dubai Canal. Being developed in collaboration with Meraas Holding, Aykon City will boast Dubai’s first all-suites 80-storey Aykon Hotel and Residences, a 63-storey Damac Maison serviced hotel residences, a 60-storey apartment tower, a 65-storey office tower and two 30-floor ultra-luxury residential towers.

Damac is also developing the Akoya Oxygen residential community along the Umm Suqeim Expressway, which will have the region’s first rainforest and will be completed before Expo 2020.

Two other developers – race track developer Meydan and leading real estate company Sobha group – have joined hands to launch the third phase of Mohammed Bin Rashid Al Maktoum (MBR) City – District One, which is expected to be a stunning new community spread over a 45-million-sq-ft area.

Among other striking developments, the Al Habtoor City on Sheikh Zayed Road witnessed the opening of the St Regis, part of Starwood Hotels & Resorts, last year. The massive development will feature two other Starwood hotels under the W Hotels and Westin brands, three residential towers, and a water-themed show by Dragone, the world’s leading cultural creation company.

The Dh4-billion ($1.09 billion) Jewel of the Creek is also taking shape in the Port Saeed area. The project is a mixed-used development being managed by Roda Hotels, the hospitality arm of Dubai International Real Estate (see separate article).

Meanwhile, the emirate’s iconic Dubai Marina area will host yet another stunning project – The Residences at Marina Gate project, which will feature 1,400 homes. The Select Group has start work on all three towers of the complex (see separate article).

Dubai Opera ... cultural epicentre.

Infrastructure

Last December, Dubai set aside Dh16.6 billion ($4.52 billion) for infrastructure, transport and related expenditure, an increase of Dh1.8 billion ($490.07 million), as part of its 2016 budget.

The Roads and Transport Authority (RTA) has been allocated a Dh7.6-billion ($2.07 billion) budget for this year with the lion’s share – 37 per cent – set aside for rail development.

Of this, Dh3.70 billion ($1 billion) will be spent on 55 infrastructure projects comprising 12 new road schemes and 43 ongoing developments, according to Mattar Al Tayer, the director-general and chairman of the board of executive directors of RTA.

According to Al Tayer, some of the key projects set for completion this year are the Dubai Water Canal, the Union Museum and a number of interchanges.

Work is progressing as planned on the prestigious Dh2-billion ($544 million) Dubai Water Canal project which links the Business Bay with the Arabian Gulf in a 3-km route passing through the heart of the emirate. The project, which boasts a new shopping centre, four hotels and 450 restaurants as well as luxury housing and cycling paths, is being developed by the RTA along with Dubai real estate groups Meydan City Corporation and Meraas.

As part of the project, construction of the 1-km northern bridge on Sheikh Zayed Road in the direction from Abu Dhabi to Dubai has been completed, while works have commenced on the southern bridge in the opposite direction. The entire work will be completed by August next year. Excavation works at the canal are scheduled to be finished by September-end.

Meanwhile, the RTA is expected to award the contract shortly for a key route linked to Dubai Metro’s Red Line and connecting the Expo 2020 site. Bids for the contract to design and build the 14.5-km-long extension of the line – Route 2020 – are currently under evaluation.

This apart, work on the design of the 20.6-km extension of the metro’s Green Line is set to begin early next year.

Among other major RTA projects, a study is expected to begin on a 5-km-long extension of Dubai Tram.

Meanwhile, Dubai Electricity and Water Authority (Dewa) has allocated over Dh2.6 billion ($707 million) for electricity, water, and renewable energy projects. It has launched various initiatives to make Dubai a smart, integrated and connected city ahead of Expo 2020 and in line with the Dubai Plan 2021.

In line with its commitment to sustainability, Dewa has also assigned a large part of its budget to clean-energy-related projects. Most prominent among such projects is the Mohammed bin Rashid Al Maktoum Solar Park and the Shams Dubai to encourage building owners to install photovoltaic panels to generate electricity from solar energy and connect it to Dewa’s grid.

Mohammed bin Rashid Al Maktoum Solar Park, one of the largest single-site renewable energy projects in the world, will have a capacity of 1,000 MW by 2020 and 5,000 MW by 2030 (see separate article).