The World is back on Dubai's map
DUBAI // The World islands project is about to experience a return to activity five years after work on land reclamation and the construction of the breakwater was completed.
The man-made archipelago in the shape of the continents has remained largely undisturbed since then, with only two of the 300 islands being developed.
The financial downturn meant investors who had bought into the project either put their plans for villas, resorts and marinas on hold or cancelled them. Now that looks set to change.
Dubai-based Kleindienst Properties announced this week it would soon start construction work on the Heart of Europe, an ambitious development that is planned to spread across six of the islands.
Nakheel, the master developer that created the archipelago 4.5 kilometres off the Dubai coast, said other companies were now putting forward plans to build on the islands.
The Kleindienst announcement was welcomed by Mario Volpi, the head of sales and leasing at the Dubai office of the property agent Cluttons. “It’s a positive step. From a property point of view, The World islands were always of interest because they were unique,” he said.
“But we need a few more developers to start doing work on the islands for it to start going the right way. The fact that it isn’t just one island that Kleindienst own will be quite good – there will be some activity.”
A spokesman for Nakheel said: “As master developer, Nakheel has completed all islands at The World ready for development by individual investors. Our agreement with Kleindienst Properties is a major milestone for the project and proves that is it alive and ready for development.
“We are also seeing a renewed interest in The World, with other developers submitting designs and proposals.”
Kleindienst said work would begin on one of the islands it owns, Germany, this year.
The move follows the out-of-court settlement of a financial dispute, that saw Kleindienst agree to pay an outstanding balance of Dh622 million to Nakheel’s The World subsidiary.
“We are delighted to be finally able to continue work on this iconic project, and are excited about the prospect of delivering our unique vision for the Heart of Europe development to investors,” said Josef Kleindienst, chief executive of the Kleindienst Group.
The Heart of Europe is designed to cover a total area of 557,000 square metres on Germany and five other islands – Austria, Switzerland, the Netherlands, Sweden and St Petersburg. Work on building a show villa and 20 other properties on Germany is to start in the third or fourth quarter.
Mr Kleindienst added: “We are also in the process of renewing approvals for all six islands.”
Other signs of a revival of interest in The World include the purchase of Lebanon for Dh35 million by Abu Dhabi-based businessman Ravi Raman last November, and a suggestion from Emaar chairman Mohammed Ali Alabbar that a floating bridge should be built to the archipelago.
Lebanon, the only island that has so far been developed commercially, is used for private corporate events and public parties, and Mr Raman plans to expand the resort. The other developed island is privately owned.
The increased activity comes amid an upsurge of interest in the Dubai real estate market, with prices rising and queues forming outside developers’ offices for project launches.
Property agent Knight Frank has predicted that Dubai would be one of the world’s top three property hot spots this year.
The Kleindienst agreement came a month after the Dubai World Tribunal ordered Sao Paulo Development Ltd, that had sought to withdraw from a commitment to buy Sao Paulo island, to pay The World Dh127.6m to cover owed instalments and delay fees.
Mr Volpi added: “The problem has always been that the people who bought islands had an idea that the responsibilities of Nakheel were different to what Nakheel was thinking. This is why a lot of them are in dispute.
“You hear a developer say, ‘I can’t do anything until Nakheel puts in the infrastructure’, whereas Nakheel is saying, ‘All we were ever going to do was build you the islands, the rest is up to you’.”