Business Bay stages a comeback as Dubai property market picks up
Only a thin blue hoarding separates the busy shopping district of Downtown Dubai from the new waterside office and residential area of Business Bay – yet the two locations feel worlds apart.
Turn right along a narrow road from The Dubai Mall and you are suddenly faced with piles of sand and heaps of junk. Shiny green glass buildings stand next to half-finished structures of grey skeletal concrete stalled by the downturn.
This is Business Bay, one of the areas of Dubai hit hardest by the global financial crisis. Its master plan, drawn up in 2003, envisaged the biggest office district in the Middle East, with towers of offices and homes along the lines of Canary Wharf in London’s Docklands.
With the recovery in the Dubai real estate market and a new wave of optimism hitting the city, things appear to be finally looking up for Business Bay. And as it regenerates, the area is altering its identity – with the emphasis shifting from office towers, giving greater weight to residential and leisure, rather like Downtown Dubai.
Work on Business Bay started back when high office rents and low vacancy rates prompted a building boom in office towers. Investors bought off-plan offices, like apartments, in the hope of getting high rents.
But Business Bay was a victim of its timing. Construction work on many of its projects was scheduled to start just as the global financial crisis hit the emirate and many companies exited the country, leaving office space empty.
Over time, Business Bay became known in the city as a soulless expanse of office space and an area where a few hardy expatriates made their homes, putting up with unmade roads and taxi drivers’ bafflement in return for cheap rents in luxuriously built apartments. Local agents estimate that apartments in Business Bay rent for about 25 per cent less than similar apartments in Downtown Dubai.
From a vantage point on the shore of the Dubai Creek extension, one can make out clusters of completed sleek glass buildings including the 0-14 Tower, or Swiss Cheese Tower; the world’s tallest hotel, JW Marriott Marquis; and Blue Bay Tower, looming over empty plots of sand and construction sites, many of which remain stalled.
One Monday morning this month, 24 cranes were within sight from one spot in the Business Bay area. About half of them were moving, reflected perfectly in the grey waters of the partially completed waterway.
Schemes such as Iris Bay, a striking 32-storey grey and white reclining half-disc that resembles an iPod speaker, and KM Properties’ 19-storey B2B office tower appear half-completed, remaining stalled at the same stage of construction they were years earlier.
On the other hand, work continues apace at Damac’s 22-storey Bay’s Edge tower, what will be a huge gold-coloured, D-shaped block of 220 furnished apartments. The site, a stone’s throw from The Dubai Mall, is a hive of activity with dozens of men in blue boiler suits toiling away, moving diggers and huge black pipes.
Bay’s Edge is just one of five stalled office projects in Business Bay that Damac is in the process of converting into serviced apartments, some of which had already started construction, while others were in the design stage.
Meanwhile, work finally appears to have also restarted at Omniyat’s The Pad development, a 24-storey reclining block designed to look like a classic early 2000s media player. Work on the project, which was originally started in 2008 when the scheme was known as “the iPod”, has reached a height of about 12 storeys.
When they were initially launched, both projects were described by their developers as being in Business Bay. However, when they were launched the second time they were marketed as being in Downtown or the Burj Area.
“Over the past year to 18 months we have started to see a return to construction activity at Business Bay,” says Craig Plumb, the head of research at the surveying firm Jones Lang LaSalle’s Dubai office. “However, this is led by the residential and hospitality sectors, which means that the nature of the area is starting to change from a district that had been planned to be predominantly offices, to one where there are far more apartments and hotels. At the moment we are working on at least two schemes that have changed from office towers into apartment blocks.”
“We are already starting to see schemes in areas that could really be classified as being in Business Bay being described as Downtown, and we expect to see that trend continuing,” Mr Plumb adds.
And it looks like construction at Business Bay is set to speed up this year.
On February 2, Arabtec announced that the Abu Dhabi Government-owned investment company Aabar had awarded it a contract to build three mixed-use towers in Business Bay as part of a wider contract to build 37 towers in Dubai and Abu Dhabi at a cost of more than Dh22 billion. Construction will begin in the next two months and is expected to be completed by 2020, Arabtec said.
Certainly local tradespeople are reporting an increase in business in the area.
“Business here is definitely getting better,” says Omron Shebli, the general manager at The View Cafe, which looks out over Business Bay from the top of Ubora Tower. On a Monday at lunchtime, the cafe was largely empty; Mr Shebli suggested things would pick up later in the day.
“I’ve been here one year and eight months. Trade started slowly but business is definitely picking up. In the evenings now we are full, as more people are coming here after work and more people are living here in the new towers,” he said.
Mohammed Benour works at the flower shop between Ubora and Churchill Towers. “I think there is quite a buzz here now and we get quite a few people coming to buy flowers, especially on Thursdays and Fridays,” he says. “After two years when all these new developments like Mohammed bin Rashid City start to happen and work on the 2020 Expo starts to happen, then I think the place will really come into its own and we will have many more customers.”
But office workers in the area are not so sure. Co-workers Tarek Hendi, Hesham Awwad and Ahmed Suwi were having lunch in a bustling Marad Restaurant in Business Bay.
“This place will happen over time, but at the moment I wouldn’t be tempted to move here,” says Mr Hendi. “If I didn’t work here then I wouldn’t come here.”
“This place would be more convenient for single people,” adds Mr Awad. “There are no schools close by and a lot of the places to go are still under development. It’s not like Dubai Marina or JLT, which are a lot more developed and have more things to do, more restaurants.”
Updated: February 22, 2014 04:00 AM