While the rest of the world is taken with stories of bank rescues and recession, Dubai has announced possibly its most ambitious project yet. But is the gulf state really recession-proof?
Dubai has long been a place full of optimism, superlatives and things that are, quite frankly, occasionally unbelievable. From the building of the now-iconic Burj-al-Arab hotel that really put the Emirate on the map, to the construction of the most ambitious artificial islands imaginable, Dubai is able to redefine limits and boundaries before anyone else has even thought about it.
And it isn't about to rest on its laurels, either. Dubai is still keen to extend its world influence, and visitors will soon be arriving into the new international airport hub. This six-runway construction will be the largest in the world, and will service passenger and cargo traffic 24 hours a day - and will cover an area larger than the whole of Hong Kong.
Bearing this in mind, the announcement of another district of skyscrapers along the coast of Dubai should not have attracted that much attention, but this one was a little different. For at the heart of the new Harbour project from developer Nakheel will be the world's tallest tower, reaching more than 1km upwards, the first to ever pass this milestone.
The Nakheel Tower will take more than ten years to complete, and will make up the focus point of the Harbour development, alongside 40 other towers. At over 1,000 metres tall, the Tower will have over 200 floors, 50 lifts and take 30,000 workers to build. Such is the scale of the building that visitors will be able to view the sunset over the Arabian Gulf twice on the same day. Having witnessed the Sun sink below the horizon from ground level, they can hop into a lift and watch the whole thing again from the top of the tower. If all of the reinforcing bars used in the concrete for the construction were laid out-to-end, they would stretch from Dubai to New York.
So, how is it that in the midst of the relative carnage of the banking sector across the world that Dubai is able to pump money into these new projects that will not only take years to complete, but that, by heading into uncharted territory, will be very expensive?
Perhaps part of the reason why these projects are able to be planned, announced and continued lies in their ambition. The fact that it will take at least ten years for the Tower to be completed means that there is time for the current economic crisis to right itself and for people to regain their confidence in the property and finance industries. Dubai has also built its wealth on its oil reserves and a range of leisure businesses, and has succeeded in making itself free from reliance on the income from oil exports, a creditable policy from its rulers.
At the same time, the vast majority of the construction projects in Dubai are highly leveraged, meaning that meltdown in the banking sectors of the world could lead to delays and problems for some of the more ambitiously-
Another project launched in Dubai in the past couple of weeks was the Bellatora Residences from Al Fara'a Properties, to be built in Dubai's Maritime City. In any other part of the world, this would have made a huge splash in the real estate market. Just a quick look at the project specifics shows the degrees of luxury that will be on offer to residents of Bellatora - 42 storeys of living space designed to offer sophisticated apartments delivered in a classical style. Perhaps a long way from the shouty exuberance of many of Dubai's projects, but the inclusion of an exclusive concierge service in partnership with the Quintessentially Group shows the level of buyer Bellatora is poised to attract.
Natasha Gangaramani, director of developer Al Fara'a properties, is confident of Dubai's ability to ride out the current economic struggles in the rest of the world. "A large chunk of Dubai's investors are from the GCC (Gulf Cooperation Council). The macro fundamentals of the region are extremely positive. The GCC economies are generating record high trade and current account surpluses as well as substantial fiscal surpluses. A significant boost to investor confidence was provided by the introduction of the Escrow Trust Account Law in 2007, giving investors comfort that their deposits will be safeguarded until the development is complete."
The fact that Dubai has developed so quickly, and has achieved all of this with very little going wrong is testament to the organization and determination of those involved. In the end, Dubai has only developed as a global power within one single generation, and has yet to experience the effects of a serious economic downturn, but given its approach to other obstacles put in its way, it is difficult to see Dubai not turning things to its own advantage.
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