DUBAI // In the scramble to start construction on Dubai's The World, an archipelago of 300 islands, a Belgian baron and developer of boutique hotels has nosed ahead. "It's not a race," said Baron Jean van Gysel de Meise, the chairman of V... Holding, in an interview at the members-only Capital Club in Dubai yesterday. "But we are definitely going to be one of the first to start work."
Baron van Gysel's project, called "V... Greece on the World", was this week granted the right to start construction by Nakheel, the master developer of The World. The project has also received approvals from the Dubai Government to begin work. The development will comprise 34 hotel suites and 18 villas on what would be Greece on the map of islands. Buyers of the luxury suites would have the right to stay there for two months of the year and earn half the rental income during the other months. The villas range from US$10 million (Dh36.7m) to $15m.
But the approvals are the easy part. The true challenge is building a major project on a small island 4km off the coast of Dubai. Nakheel plans to give the go-ahead to about 40 projects this year and another 90 next year. So at the peak of construction, barges full of construction material will be vying for straight passages to the islands. Even at complex projects like the Palm Jumeirah, construction lorries can at least drive to the sites by way of a bridge.
Each project on The World will have to use multiple barges to ship equipment and labourers to the site every day. The islands themselves require more foundation work because construction will have to dig below the water line. "It costs twice as much as another project on the mainland," Baron van Gysel said. He bought the two-hectare island, and 2.5ha of water, for between $10m and $20m, and will finance construction through sales of the units, personal investment and 25 per cent debt. The loans will be provided by European banks, which Baron van Gysel said had already been approved and would not be affected by the global credit tightening roiling the markets.
"There will be a slowdown in Dubai," he said. "It will be healthy. The real problems are the projects that are over-leveraged. They will have problems." The total sale value of the Greece on The World project would be about $260m, he said. About 30 per cent of the units are already sold to a mixture of wealthy individuals looking for a holiday home and international investors looking to earn rental income or profit on a re-sale down the road.
Tests on the solidity and strength of the island, known as soil investigations, would begin immediately, Baron van Gysel said. The actual marine works and construction of a metal band around the island to protect it from erosion will start in the spring of next year. Baron van Gysel said the project would be his first major hotel development. He had previously created a boutique, 12-room hotel in the south of Spain and transformed a historic building in Brussels into the "Plaza Hotel" with 200 rooms. The plans for the V... brand are focused exclusively on GCC countries for now. After opening on The World, he plans to target Abu Dhabi and Qatar for other outposts.
"When I first came to Dubai for the World Cup, I couldn't find a boutique hotel anywhere," he said. "This is a major niche market. This will bring a sense of elegance to the market." Baron van Gysel, who has a hereditary title because of his famed industrialist grandfather, spends his time between Dubai, Paris, New York and Buenos Aires. He formerly worked in corporate finance and investment in New York, at one point managing a "fund of funds" for ING. But in 2000, he dropped his financial career to become involved in interior design and property, he said.
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