Launched in late 2003, Dubailand, which Tatweer is developing, was billed as the Disneyland of the Middle East.
Progress is slow on the Dubailand dream
Launched in late 2003, Dubailand, which Tatweer is developing, was billed as the Disneyland of the Middle East, only it was to be spread over a sprawling 3 billion square feet (27,870 hectares), making it bigger than the city of Orlando in Florida, the home of its US inspiration.
According to the Dubailand website, the development will have a population of 2.5 million people, including tourists, workers and residents. It also expects 40,000 visitors a day. But almost six years on, while parts of phase one of Dubailand are ready, progress on the rest of the development, which is scheduled to be delivered in phases up to 2020, has been slow.
As it stands, Dubailand is a far cry from the vibrant colours, playful cartoon characters, thrilling rides and bustling activity of Disneyland. Most of Dubailand exists only on the drawing board. In reality, much of it is an empty landscape. In the most bustling sector under development, there are construction workers and vehicles, a building with a giant skier coming off the roof, and a six-storey-high model of a red-and-white rocket.
The pace of development has been hit by the global slowdown in travel, falling property prices and tighter finance, forcing Tatweer to review the project last December. Details of that review are yet to be revealed, although Tatweer said in a recent statement there had been no change in its vision for Dubailand. Its masterplan includes 45 theme-based projects including amusement parks, hotel complexes and leisure facilities. Five attractions have opened: Dubai Autodrome, Dubai Outlet Mall, Global Village, Jumana Secret of the Desert and Dubai Sports City.
However, other projects appear to have stalled. The Great Dubai Wheel and Lemnos, described as a high-luxury world for women, were announced, but there has been scant further information.
Asked about the impact of the merger on Dubailand, Tatweer declines to comment, saying any information would come from Dubai Holding.
Mohammed al Habbai, senior vice-president of Dubailand also declined to comment on the merger. He said: "Our projects in Dubailand are ongoing as planned. Nothing has changed." Analysts say the pace of progress on Dubailand is unlikely to change until the joint venture company has been formed and a full review of the development is completed.
Emaar's shares have taken a battering since the merger plans were announced on Saturday, after investors sold through fear of a dilution of their shares. Shares fell 10 per cent in early trading last Sunday, the maximum allowed by the bourse, and continued to fall during the week. Analysts fear future earnings could be affected.
Emaar is going to inherit a lot of projects, and it's going to get the liability of all or part of these projects," says Joe Kawkabani, the managing director and head of asset management at Algebra Capital. "They need to do the merger first and then decide which projects they want to keep and which ones they want to get rid of, and how they'll handle those they do keep. Dubailand is a massive project, and I suspect a lot of it will be shelved."
Still, the merger might make financing the completion of Dubailand easier, according to Bobby Sarkar, a research analyst at Al Mal Capital. "Dubailand has obviously been delayed and I don't think that scenario will change in the near future," he says. "The near to medium-term projects will be the priority, as Dubailand completion is some years off. But if the new merger gets funding from the Dubai Government, then the financing prospects for Dubailand might actually improve."
Dubailand is an essential part of Dubai's aim to attract 15 million visitors a year by 2015, up from 7.5 million last year.
The attractions planned at the development would play a vital role in broadening the appeal of the emirate, particularly as a leisure destination for families, according to Alex Kyriakidis, the global managing partner at Deloitte Tourism, Hospitality and Leisure. "Dubai definitely needs a destination theme park, of the magnitude that a Universal Studios could bring, to be able to market itself to wider niches," he says.
The marketing director at Tiger Woods Dubai, Liz Riemersma, declined to comment on the impact of the Emaar merger on the project, but said the recent comment that the project was "progressing" still applied. The multimillion-dirham Tiger Woods development is supposed to be one of the centrepiece projects of Dubailand, with plans for 22 palaces, 100 luxury villas, a 33,445 square metre hotel and 75 mansions. But the US golfer said last month the golf-themed project had been delayed by at least six months.
Ron Hinchey, a partner at Cluttons, a property consultant, says it is difficult to assess the fate of Dubailand until the merger is in place and a clearer picture on how the downturn will affect the demographics of Dubai emerges. "With the current uncertainty the market is facing, any big masterplan decisions will be put on hold for at least six months," he says.
So far, more than 20 projects, which include residential areas, have been signed off for development as part of the first phase of Dubailand. These include the DreamWorks animation park, Universal Studios and City of Arabia. Many of the homes that make up Falcon City of Wonders, a development that will include replicas of the Eiffel Tower and leaning tower of Pisa, are in the advanced stage.
"Dubailand is a phased development to be built over a number of years due to the sheer size and scale of the plans," the statement from Tatweer says. "Phase one is already open and operational, and we project eight million visitors to Dubailand attractions this year."
A source for Dubai Outlet Mall says that while the mall expects to attract six million visitors throughout this year, more needs to be done to raise awareness among customers about the wider Dubailand development. "Many customers come to the mall and it is not clear to them that we are part of Dubailand. "We're trying our best to promote the location, but people need to know more about Dubailand itself. Dubai Outlet Mall has been attracting many visitors. "We are in the middle of the desert at the moment, but once more projects are here, we expect visitor numbers to go up."