Meydan plans to build 16 office blocks at its Dh10 billion (US$2.72bn) racecourse city project in Dubai. The company, which completed the racecourse and grandstand at Meydan City this year, has signed an agreement with the Chinese construction firm Guangsha Middle East to build the first phase of Meydan Metropolis Business Park.
But the value of the deal has not been finalised as the partners negotiate with subcontractors, said Saeed Humaid al Tayer, the chief executive of Meydan. Meydan executives expect to finish the project within two years at a time when office space in Dubai may have increased by about 80 per cent, putting pressure on prices, the property advisory Colliers International says. Mr al Tayer said the office buildings had already been sold to between 65 and 70 "premium investors" three years ago, and that the move was part of Meydan's preparation for a market rebound. Investors in the project include Amlak Finance and Emirates NBD.
"We have been extremely positive and have reason to believe that the market will bounce back," he said. "We have a philosophy here that we have to have clients for our space, residential or office. "Maybe the market today has an excess of office space but Meydan has advantages: it's different, it has low density, it has a lifestyle, a racecourse, a business centre and is very accessible." Meydan City was announced in early 2007 with a remit to complete the racecourse, which hosted the $10 million Dubai World Cup in March, in two years.
The economic downturn has allowed Meydan to benefit from a 30 per cent decline in construction costs as it progresses with the development, which is spread across more than 620 hectares and includes residential, leisure and commercial components. Guangsha Middle East is part of Guangsha Holding Venture Capital, one of China's biggest conglomerates. The company has already built the Falcon car park at Meydan City.
Mr al Tayer said he wanted to reach a fair deal with the contractor. "In the past, when there was high demand, there were some entities who made a little extra," he said. "There's been a substantial fall in construction costs. Steel has been fluctuating but we've been monitoring everything. We want a fair deal and one that will make the market more competitive." Meydan said in March it had signed land deals with investors worth Dh370m for the construction of 200 villas at Meydan City, with work expected to be completed in late 2015.
"We are not going to rest until we have reached our overall objective ? it was always going to be a five to 10-year project," Mr al Tayer said. The Meydan racecourse brand has also moved into China, where the company will invest in the Dh14.7bn Meydan Phoenix City in Tianjin municipality's Ninghe County. The project, announced in March, is a joint venture with Tianjin International Equine Group - the investment arm of Meydan Group - Japan's TAK Design Consultants, and the Chinese companies Tianjin Farm Group and Zhouji Jiye.