A Versace-branded luxury hotel will finally open in Dubai seven years after it started construction.
Palazzo Versace Dubai, the second hotel under the fashion house, is expected to be finished before the end of next March, according to the developer Enshaa.
The 215-room property also started recruiting last month. The hotel complex will include 169 luxury condominiums with one to six bedrooms and D1 Residential Tower. When it opens, Versace will join the fashion houses Armani Hotel in Burj Khalifa and Bulgari, which will manage a hotel under development on Jumeirah Bay Island.
Palazzo Versace Dubai is located within the Dubai Culture Village project. The infrastructure work for 9 million square feet of the Culture Village project is also expected to complete early next year, according to its master developer Dubai Properties Group.
The project, located between Garhoud Bridge and Business Bay Crossing, will eventually have residential, commercial, retail, entertainment and cultural components. A 3.8-kilometere creekside promenade walkway will connect it to a souq and marina.
While locations such as Downtown and The Palm continue to attract hotel investors, the area around Festival City Mall has few waterfront properties. Among them are an InterContinental and a Crowne Plaza besides a Park Hyatt Dubai across the creek. Infrastructure build-up was also slow in the area.
“The financial crisis has impacted all of the other developments in that area and consequently this will continue to be a building site for quite a few years,” said John Podaras, a partner at Hotel Development Resources, a consultancy based in Dubai. “One thing to remember about Dubai is that things can change very quickly, once a tipping point in a particular development has been reached.”
Emirates Sunland Group, a joint venture between the Enshaa subsidiary Emirates International Holding and the Australian developer Sunland Group, launched the ambitious project spread over 1.3 million square feet that was due to include an air-conditioned beach. Plans for the temperature-controlled beach were eventually scrapped over environmental concerns.
In 2011 Enshaa, whose major shareholders include Majid Al Futtaim Group, Emirates Investment Group and Abraaj Capital, took full control of the development. It swapped its stake in Palazzo Versace Gold Coast in Brisbane with Sunland as work on the Dubai project slowed following the global financial crisis. It had sold 80 per cent of the residences by then.
But many buyers failed to follow through on the payments, slowing down the construction, according to Soheil Abedian, the managing director of Emirates Sunland Group, in 2011.
Prices at the apartments have also kept falling. A two-bedroom furnished apartment, which can be put back into a hotel rental scheme, now starts at Dh6 million at property rental websites. These are listed to be complete towards the end of the year. In 2011, a two-bedroom apartment was available at Dh8.5 m.
Enshaa also cited a lack of power, water and other utilities on the site for the delays. The project was originally expect to cost Dh2.3 billion.
Billed as an “ultra-luxury hotel”, Palazzo Versace will have furniture and fittings designed by Donatella Versace, the daughter of the founder of the fashion house.
While room rates at the property are yet to be disclosed, the only other Palazzao Versace is on the Gold Coast, Australia.
It has room rates starting at US$320 per night while condominiums start at $1,372 a night this month. The Australian property opened in 2000.
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