Dubai sees no reason to stop scraping skies

Dubai rolled out some of its most ambitious projects, even as stock markets around the world plunged

United Arab Emmirates - Abu Dhabi - Oct. 7 - 2008 :  People watch the scale model of Nakheel Harbour & Tower by Dubai's Capital during Cityscape Dubai at Dubai International exhibition Centre. ( Jaime Puebla / The National )
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Dubai rolled out some of its most ambitious projects, even as stock markets around the world plunged again and global credit markets contracted further. Two mammoth towers were announced that would easily dominate the list of the world's tallest structures. Developers spared no expense, outfitting their stands with mood lighting, interactive computer displays, large-scale models and espresso counters. One developer, Gulf Finance House, set up a four-metre high golf simulator to promote its "ranches" in Marrakech. Another, Al Barari, covered the floor of its stand with real grass to capture the garden-feeling of its high-end villas in Dubailand.

As major property companies around the world watch their projects stall or get scaled back, the Dubai developers are pushing on in the opposite direction: bigger, taller, more outlandish and more ambitious. "The UAE has weathered a lot of storms," said Thabet Hashem al Qaissieh, an investment associate at Al Qudra Holding, who mingled with passersby at the company stand. "We'll get through this one, too. There is a lot of liquidity in the Gulf."

Still, the mood was not as frenetic as Cityscape Abu Dhabi in April, where speculators stormed the property stand of Aldar Properties and had to be restrained by security guards. The tamer mood in Dubai was in part due to a decision by the Real Estate Regulatory Authority and Dubai Land Department - which together oversee the emirate's real estate market - that no actual sales take place at Cityscape. Instead, potential buyers were allowed to set up appointments to buy apartments later.

"It is slightly different from last year. Last year it was sort of queuing up and fighting each other, standing on chairs," said Sameeh Khaleel, a UK citizen who bought on Reem Island in Abu Dhabi last year. "I am just kind of observing this year before I buy anything else." Yesterday the crowds were "watchful," said Ousama Ghannoum, Aldar's marketing and communications director. "Professionals in the field have been asking me about our sales, what is going on in the market," he said. "They want to know how things are being affected by the global market."

The relative quiet that had descended on the UAE property market in recent weeks had left buyers cautious, he said. Colliers International, an international estate consultant, said in a report on Sunday that the rate of growth in Dubai house prices had eased to 16 per cent in the second quarter, after rising at 43 per cent in the first three months of this year. The report said it expected the growth to remain flat for at least another year.

Another theme that emerged on the first day was rebirth. Deyaar Development, with a fresh chief executive and a new logo, announced it would pursue larger, community-sized projects as well as diversify its portfolio by starting projects in other countries and acquiring companies with distressed assets. Deyaar has had a tough six months since its former chief executive, Zack Shahin, was arrested on charges of financial wrongdoing, part of a larger crackdown on alleged corruption in the emirate's property sector.

"I don't think it has had a big impact," said Markus Giebel, the new chief executive. "This is part of a maturing market. Corporate governance does not come with an early market, but now this is becoming widespread." Limitless, another Dubai-based developer, unveiled a new brand that emphasised a more humanistic philosophy. Nonetheless, the international credit crisis hung in the background amid the canapés and hordes of goody bags for potential buyers. Rumours swirled throughout the day about mergers in the property industry. Earlier this week Tamweel and Amlak Finance announced they had entered "exploratory merger talks" - a move that analysts said could bolster the merged companies against a worsening credit market.

"Greater consolidation will also bring greater confidence in the market," said Jade el Khalil, the chief sales and marketing officer at Dubai Properties. "What we're seeing today is a gradual shift from speculative sales to a consumer-led market." Sina al Kazim, the chief executive of Meraas Development, was ebullient, sitting with white leather seats and a swimming pool-size model of its new master development, the Dh350bn Jumeira Gardens.

The development will contain as many as eight iconic buildings, including three by Chicago-based architects Adrian Smith, who designed the Burj Dubai, and Gordon Gill. Located just across the road from the Burj Dubai, Mr Smith's 1 Dubai will have three connected towers rising more than 600 metres at their highest point. Along with Nakheel's just-announced Al Burj, which will be more than one kilometre high, will form a triangle of tall towers in the southern part of the city - each a testament to the ambitions of the emirate and its leadership.

"We're talking about very strong fundamentals," he said. "Any great city has its ups and downs, but Dubai has ample cash and enough investors looking for the right kind of investment. Things might slow, I'm not saying it won't. I'm saying that financially, Dubai is strong enough to last a long time." with additional reporting by Angela Giuffrida and Nathalie Gillet