Abu Dhabi culture centre needs more time to grow

Saadiyat Island: A strategic review of the capital's Saadiyat Island cultural development acknowledges the size and complexity of the project and takes into account current market realities.

Despite delays Abu Dhabi's flagship tourism project on Saadiyat Island is progressing.
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All of the elements of Saadiyat Island, Abu Dhabi's multibillion-dollar cultural and resort destination, are still going forward, although development of many of the key attractions has been pushed back, the project's master developer says.

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"The timing has changed substantially, but we have not taken anything out," says Shaun O'Connor, the chief financial officer at Abu Dhabi's Tourism Development and Investment Company (TDIC). "The master plan stays."

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The Saadiyat Island development, announced five and a half years ago, is envisaged as a vital part of Abu Dhabi's diversification strategy and was originally projected to cost US$27 billion (Dh99.17bn).

Three museums are planned in the first phase of the cultural district of the island: the Louvre; the Zayed National Museum; and the Guggenheim.

The Louvre Abu Dhabi, the result of an intergovernmental agreement between France and the UAE signed more than four and a half years ago, is due to be built first. But TDIC concedes it is now likely to be delayed by about a year. The developer intends to stagger openings of the Zayed National Museum and the Guggenheim, which is to be the biggest Guggenheim in the world.

"Our original approach was to try and launch three museums simultaneously somewhere around 2013, 2014," Mr O'Connor says.

The schedule was "exceptionally aggressive", given that TDIC was launched only six years ago and considering "the monumental task of bringing a single museum online versus three", he said.

The island has been designed with Abu Dhabi's broader tourism strategy in mind, which is to attract wealthy travellers by offering golf, museums and luxury resorts. Abu Dhabi aims to attract almost 8 million guests a year by 2030, quadruple its current numbers.

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The developer was aiming to complete Saadiyat Island by 2020 but now says that will depend on the state of the global economy.

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"If the world comes back strong and the demand starts to grow and tourism starts to build into the region at the rate that it has over the last three years … if that continues, 2020 could absolutely be possible to build out a large majority of Saadiyat," says Mr O'Connor. "If it slows down at all, 2020 extends."

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To date, the attractions that have launched on the island are the Saadiyat Beach golf course, which opened last year, and the exclusive Monte Carlo Beach Club, which opened last month.

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There is also a gallery and visitor's centre called Manarat Al Saadiyat that offers a view of plans as well as rotating exhibits.

Plans to build a Frank Gehry-designed clubhouse to accompany the golf course are on hold until there is a greater number of members to make use of such a facility, TDIC says. The island's central business district has also been shelved to avoid competing with Sowwah Island and Reem Island, which are trying to fill their properties.

Uptake for the first attractions, such as the Monte Carlo Beach Club, has been fairly subdued.

"It's starting slowly," says Bernard Lambert, the chief executive of Monte Carlo Société des Bains de Mer, based in Monaco, which runs the club.

"I'm pretty sure that [TDIC] has plans to move forwards and complete what they have started."

Two luxury resorts are scheduled to launch on Saadiyat early next month. St Regis, managed by Starwood, has been built by TDIC. The Dh1 billion Park Hyatt has been developed by Abu Dhabi National Hotels.

Analysts say the two properties will not necessarily suffer amid the slowdown of the project, likening the situation to the unfinished Palm Jumeirah in Dubai.

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"As long as the accessibility is there and the service is provided, it could have minimum impact," says Chiheb ben Mahmoud, the senior vice president of Jones Lang LaSalle Hotels, Middle East and Africa. "Saadiyat is supposed to be a destination on its own."

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Other hotel projects along the beach strip, including the Shangri-La and Rotana resorts, have been delayed, according to TDIC.

"We sold the land to private developers," says Mr O'Connor.

"Their decision to go forward is theirs. We don't get involved in that. They are making a market determination on when is the right time to bring a hotel to market.

"We still own six plots along the beach that we have not sold off that we will develop within TDIC. Today I would not develop a hotel.

"There's no need for me to compete with St Regis. We want that hotel to get stabilised. I will defer putting more hotels [in] until market demand warrants it."

The same reasoning prompted the company to slow its development on the Eastern Mangroves resort on the main island of Abu Dhabi, which is now expected to open in the first quarter of next year. Occupancy is expected to fall as a wave of hotels opens in coming weeks.

The second phase of Saadiyat's cultural district includes a Performing Arts Centre and a maritime museum. It is unclear when work on these projects will begin.

"We are going to focus on phase one and build out those activities before we worry about phase two. They're still expected to be delivered," says Mr O'Connor.

kbrass@thenational.ae