x Abu Dhabi, UAETuesday 25 July 2017

Project that captured the public's imagination

Planning for the Waterfront project began in 2004, when officials at Nakheel recognised the value and importance of Dubai's last piece of natural coastline, an 8km stretch on its western border with Abu Dhabi.

Planning for the Waterfront project began in 2004, when officials at Nakheel recognised the value and importance of Dubai's last piece of natural coastline, an 8km stretch on its western border with Abu Dhabi. The developer brought in an American design firm, Gruzen Samton, to help map out what was undoubtedly one of the biggest modern sub-cities conceived from scratch.

The Waterfront, though it went through many design changes - adding and subtracting from a series of scorpion-tail islands west of the Palm Jebel Ali and removing a super-tall skyscraper enigmatically referred to as "Al Burj" from the Madinat al Arab - was the embodiment of the new Dubai. It would be a sprawling outer city with its own airport at Jebel Ali, built on a stretch of desert and beachfront that would take almost two hours to walk from end to end.

"We were working with an empty canvas," says Khaled al Huraimel, who was the managing director of the Madinat al Arab and chief operating officer of the Waterfront project in its early days. "We studied a lot of cities around the world, and we looked at what makes them liveable. We made it one of the best cities in the world." In view of its gigantic scale, building the Waterfront would be done in stages. Construction would be phased over about 15 years and the area would be incorporated into the even larger Arabian Canal project that was being built by the Dubai World subsidiary Limitless. This would be a rectangle of land framed by a 75km canal reaching from just west of the Dubai Marina deep into the desert, and then looping back to empty into the Arabian Sea on the Waterfront's western fringe.

"It was never overhype, sell everything," Mr al Huraimel says. Marketing the Waterfront was a challenge at first, according to people involved in the initial phases. When the project was officially launched in 2005, many investors were sceptical of its prospects, given its distance from the centre of Dubai. "When it was first launched and land was offered for the first time it was not easy to sell because people saw it as quite far, bordering Abu Dhabi," one former Nakheel executive said.

Nakheel had formed a holding company to manage land within the Waterfront, and aimed to sell up to 49 per cent of it to outside investors, but that idea was soon scrapped, possibly because of difficulty in selling shares to banks and other institutional investors. But once people began to consider the Waterfront would have its own airport and function in some ways as a second city centre, the mood among investors started to change and the Waterfront began to sell.

When the first plots were released in the middle of 2005 they sold out in two weeks, mostly thanks to a Dh8 billion (US$2.17bn) investment by Al Burj Real Estate, a company formed by prominent Gulf investors to seed the project. The Waterfront was soon touted on huge billboards facing Sheikh Zayed Road as a city "twice the size of Hong Kong", even though Nakheel's description of it in 2008 as 1.4 billion square feet would seem to fall a little short of that mark. Hong Kong island is about 835 million square feet.

Reclamation work to form offshore islands was under way by the middle of 2006, and contractors were brought in to begin the $4bn first phase of infrastructure work, including roads, sewerage, water pipelines and electricity terminals. Developers scooped up land and by early 2008 a number of big companies had launched projects including Landvest, Omniyat, ETA Star, Alternative Capital Invest (ACI), Avanti and even Ivana Trump, who had plans for Dh1.5bn diamond-shaped twin towers called "Le Diamond".

"Until the real estate crisis hit, about a year and a half ago, the Waterfront was doing very well," says Mr al Huraimel, who left Nakheel in 2007 and now works for an environmental company in Sharjah. "There was lots of demand, people launched projects and prices went higher and higher. It appreciated in value considerably, especially in 2007." Times have clearly changed since prices peaked in 2008. Developers saddled with losses on other projects have stopped work in the Waterfront, bereft now of the financing they once enjoyed from newly conservative banks, and battling with investors over fenced-off patches of sand. There is still some construction equipment, but other areas have been completely abandoned.

Problems at Nakheel, which has been blamed for much of the turmoil at Dubai World as it aims to restructure $26bn of debt, have not helped. With no certainty on when, or if, Nakheel will finish the Waterfront's infrastructure, providing electrical, sewerage and water connections to buildings, developers are wary of continuing with construction even if they have the money to do so. "It's unfortunate, but it's not just the Waterfront, it's across the region," Mr al Huraimel says. "If the [property] crisis had never happened, the Waterfront would have continued. I think the status of the Waterfront is similar to the status of other Nakheel projects; there are people who bought lots of land, as in other areas of Dubai. Some were speculators, some were serious, but now it depends on Nakheel.

"People are waiting to see what they do next." @Email:afitch@thenational.ae