"But who wants to live next to a theme park?" asked a member of the audience midway through a panel discussion at last month's Arabian Hotel Investment Conference. Judging by the nods and murmurs that rippled around the room, it was a question on many people's minds. The discussion was about the rapid growth of mixed-use developments throughout the UAE that pair major residential areas with theme parks, race tracks and other in-your-face, crowd-pulling leisure facilities.
To the average person, the idea of screaming children on rides and cars roaring around a track and animatronic dinosaurs just over the garden fence might be a turn-off when choosing their new home. But to many of the country's developers, these projects - pioneered in the UAE by the 280-square-km Dubailand - are the cutting edge in the industry. They deliver better returns and have the potential to generate the tourist revenues that the development itself, and the economy as a whole, needs to sustain itself.
"We struggle with it every day with our marketing campaign," said Steve Tight, the chief executive of Aqua Dunya, in response to the audience member's question. "It's a fine balance you have to find. The question is: Are you selling a building adjacent to a theme park or a prime location in Dubai?" Aqua Dunya is a mixed-use development in Dubailand centred around the fictional story of Rakan, a young boy who builds a giant wooden boat called Dubai Pearl and explores the world. Part of the park has several dry and wet rides, including the boat itself. In a second area, Adventure Reef, visitors will be able swim with dolphins and go scuba diving on an artificial wreck.
The entire themed development will have hotels, a 1,400-seat theatre, retail and restaurant areas, 170 holiday homes and 1,100 apartments that are intended for permanent residents. Mr Tight's philosophy for the layout was: the shorter the stay, the closer the living quarters should be to the theme park. Within the "Dubai Pearl" area is a five-star hotel with a cruise boat theme. Each night, there are "bon voyage" celebrations and guests stay in "staterooms". The next layer includes the holiday homes and other hotels, many of which had "backdoor access into the theme park", he said. Then come the 5.7 million square feet of residential apartments, which are low-rise and situated out of view of the theme park. Mr Tight said the units would be marketed as being close to water, not next to a theme park and the inevitable noise pollution that emanates from it.
"They are kind of hidden, the apartments. We are focusing on the water features and landscaping for these," Mr Tight said. "We are not really playing on the fact that you are adjacent to a theme park." The financials of these Dubailand-style, mixed-use developments are fairly simple: Use the returns from the residential sales to fuel the construction of the theme park and hotels. As each phase comes online, the developer gains a new cash flow. In the long run, profits are vastly higher than a simple one-off sale of residential units. Most developers elsewhere in the world would be wary of taking on such a massive project, and the infrastructure that it requires, but Dubai's wealth and growing tourist numbers made it an attractive venture, experts at the conference said.
So far the projects appear to be attracting both residents of Dubai and foreigners looking for holiday homes and investment properties. Officials from City of Arabia, also in Dubailand, said that about 80 per cent of the people buying apartments at their development were from abroad - including expatriates who lived and worked in the country, and people who were looking for holiday homes. City of Arabia is a "city within a city", with office towers, residential buildings of varying sizes, a giant mall and a theme park called "Restless Planet", full of animatronic dinosaurs. An artist's impression of an aerial view of the project shows pterodactyls circling from above. Another shows an open-jawed tyrannosaurus rex outside the mall.
"Many of our customers want a place to live and work," said Jocelyn McBride, a marketing manager at Iyas & Mustafa Galadari Group, the project's developer. "The market has become more sophisticated. People want a place to live that involves building communities, rather than just offering them space." Nooman Khan, the group's vice president of sales, said that City of Arabia was designed to be a self-contained community, which would offer a respite from the transport nightmare of Dubai.
"The residents of City of Arabia should have everything within reach," he said. "Basically we are discouraging the use of cars. All the parking garages are underground. We have our own monorail and all the shopping you could possibly think of - and restaurants. You shouldn't have to leave." But what about the dinosaurs? "You won't necessarily see dinosaurs parked on the lawn," Ms McBride said, adding that the artist may have got a little carried away with his impressions. She emphasised the theme of a community with many options, but also with a degree of isolation of the various parts, to avoid overexposure.
The project will have 36 towers when completed and the group said it had already sold 80 per cent of the first five zones to go on sale. The plan is for "Restless Planet" to become a premier destination for "edutainment" - educational in terms of teaching about dinosaurs, as well as entertaining. Union Properties, the developer of MotorCity, on the western edge of Dubailand, is trying to create two almost opposite worlds side by side.
On one side is a race track and a Formula One theme park, as well as hotels and offices. Then, just a walk away, will be a "fully green community" with 3,000 residences and shopping, according to Simon Azzam, the chief executive of Union Properties. The residences would be "in a congestion-free environment" with access to medical clinics, schools and shopping, he said. Isolation of the living area from the leisure element was the key, Mr Azzam said.
"You won't be able to hear the race track," he said. "We have very clearly designed this project to have two components, divided by a street that acts like a buffer zone." "On one side is a very serene living environment. On the other will be a place for the excitement of cars and racing." Still, the residential neighbourhood will also be known as "MotorCity". Union Properties is looking to open more of the Formula One theme parks around the world - in Europe and the Far East - but Mr Azzam said it was not clear whether the projects would include a similar residential component. "The market here is unique," he added.
The chief operating officer of Dubailand and chief executive of Tatweer, Abdul Wahab al Halabi, described the situation succinctly. "You can't build a sustainable economy that is just one big theme park. It has to be more Orlando than Disneyland," he said, referring to Orlando's ability to sustain a regular city life, while remaining a major destination for tourists from around the globe who seek out its multiple theme parks and golf courses.
Dubailand may become best known for having such famous entertainment names as Universal Studios, DreamWorks and Marvel, as well as the Dubai wheel, one of the largest observation decks in the world. However, thanks to the themed mixed-use developments, it will also be home to about 2.5 million people, a bigger population than Vienna or the Yemeni capital, Sana'a. "What we have is one of the largest mixed-use developments in the world," Mr Halabi said. "It needs diversity and infrastructure to succeed."
