Dubai on white-knuckle ride to revival with Dh10bn theme-park project
In a week bursting with announcements that Dubai is pressing ahead with a new phase of mega projects, experts yesterday voiced a qualified vote of confidence to the emirate's latest proposals to develop five Florida-style theme parks at Jebel Ali.
Late on Tuesday night, three years to the day since the Dubai World crisis rocked the world economy, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, announced he had approved a Dh10 billion (US$2.7bn) mega scheme to develop the five linked theme parks.
The scheme is to be built by Meraas, Sheikh Mohammed's own property and investment company, starting with Dubai Adventure Studios fun park, plans for which were announced last December and which is expected to be completed by 2014.
The announcement follows Sheikh Mohammed's statement on Saturday that developers Emaar and Dubai Holding will be pressing ahead with Mohammed bin Rashid City, which will comprise a Universal Studios theme park, more than 100 hotels and what would be the biggest shopping mall in the world.
It also comes less than a week after Dubai unveiled its master plan for the Dubai Trade Centre Jebel Ali, which the city's authorities hope will attract 25 million visitors if its bid succeeds, and follows Sheikh Mohammed's announcement last week of a Dh4bn investment in new and relaunched developments. These include the Dh2.5bn expansion of the Madinat Jumeirah Resort and a new footbridge across Dubai Creek.
The news gave a boost to the Dubai Financial Market General Index, which rose from 1,589.02 to 1,591.46 during trading yesterday, as investors demonstrated their renewed faith in Dubai's prospects.
"This new plan really aligns with what Dubai is trying to do with its 2030 plan in building up its leisure and hospitality infrastructure," said Matthew Green, the head of research and consultancy for CBRE's UAE operation.
"The UAE can't compete with the tourist markets of the United States and Europe unless it improves its family entertainment offering. And, at the end of the day, this whole project will not be built out at once. It will be very much a phased development.
"Last year, 9.1 million visitors came to Dubai and this year we expect it to be around 10 million. If we keep seeing growth in visitor numbers of around 10 per cent then this sort of amount of theme parks could well be needed," he added.
"The spotlight is back on to Dubai," said Mario Vopli, the head of sales and leasing at Cluttons. "Over the last few years newspapers in the UK have largely ignored Dubai but with these announcements people are again starting to talk about the city in a good way. I believe Sheikh Mohammed could well be a step ahead of all of us here. White-knuckle rides appeal to all of us - whether we need six is debatable - but it's good to see that there is a plan to differentiate them into different categories. Above all it's getting people to talk about Dubai again."
However, elsewhere experts worried that the rush of announcements within one week would be too much for the market.
"One of the major components of Mohammed bin Rashid City, announced earlier this week, was entertainment. Now, within a week there's another announcement in the entertainment sector," said Craig Plumb, the head of research for the Middle East and North Africa at Jones Lang LaSalle.
"There's only a certain amount of money which is going to be spent on entertainment in Dubai. There might be potential for competition between the projects for the entertainment dollar."