Dubai

Dubai Eye on  Meraas’ Dh8-billion Bluewaters Island ... expected to open this year.

Dubai Eye on Meraas’ Dh8-billion Bluewaters Island ... expected to open this year.

Battling it out

The Covid-19 pandemic has put a serious damper on the buoyancy that Dubai has experienced over the past year. With Expo 2020 Dubai facing a delay, all sectors – including construction – have to rethink their strategies. Businesses hope Dubai’s can-do approach will help put the wheels of growth back on track once the virus battle is won.

April 2020

The world is combating the novel coronavirus by curtailing movement of people and economic activities and Dubai is no exception. At the moment, the extent of economic impact of the Covid-19 pandemic is still unknown, but it’s going to be enormous. And this could be an understatement.

As we go to press, the situation is still fluid. Many of the economic activities are at standstill with plans for a number of global events put off for later dates and the fate of many more still under consideration. The world’s greatest show, Expo 2020 Dubai, is also seen facing a delay.

How much Dubai’s construction sector will be impacted by the Covid-19 crisis depends on how long it lasts. For now, construction is one sector that is allowed to continue its operations.  However, it cannot be denied that the slowdown in other sectors will surely impact construction activities too. Once the virus is driven away, the market expects a V-shaped recovery, especially with the release of the pent up energy, given that the city ranks among the world’s top construction markets.

Expo 2020 Dubai ... a catalyst for growth.

Expo 2020 Dubai ... a catalyst for growth.

According to a list compiled by leading data and analytics company GlobalData, Dubai has been ranked among the top ‘Construction Mega Cities’ for 2019 – those having a pipeline of projects worth over $30 billion – along with London and New York.

Dubai dominates the 2019 list with total project values amounting to $611.2 billion, ahead of London which comes in the second place ($342.9 billion) and New York in third ($285.2 billion), while Moscow slipped to fifth plac e ($201.4 billion) when compared to the 2018 rankings.

In a decision that will have a huge bearing on various sectors of Dubai’s economy, the Steering Committee of Expo 2020 Dubai during a virtual meeting agreed to explore with the Bureau International des Expositions (BIE), the World Expo governing body, the possibility of a one-year delay to the opening of Expo 2020.

“While they remain firmly committed to Expo 2020, many countries have been significantly impacted by Covid-19 and they have, therefore, expressed a need to postpone the opening of Expo 2020 Dubai  by one year, to enable them to overcome this challenge. The UAE and Expo 2020 Dubai have listened. And in the spirit of solidarity and unity, we supported the proposal to explore a one-year postponement at the Steering Committee meeting. We look forward to welcoming the world, which we are certain will only come out of this pressing challenge stronger, and more resilient than it ever was,” said Reem Al Hashimy, UAE Minister of State for International Cooperation and Director General, Expo 2020 Dubai.

Billions of dollars are being invested by the emirate to host the Expo 2020 Dubai – the first time the event will be staged in the Arab world. Work continues at the event site, where Expo-led construction is complete, and international participant pavilions are being completed.

The construction sector has been indirectly affected by some of the social distancing measures that have been implemented to ‘flatten the curve’ of the spread of Covid-19, according to GlobalData.

One of the major concerns for the construction sector is materials supply. With many countries suspending manufacturing and business operations to contain the virus, the market will be hard-pressed for supplies and this is bound to delay several projects that are under way.

The UAE Central Bank’s Dh100 billion ($27 billion) stimulus package and the other steps announced by Dubai to mitigate the impact on the private sector and small and medium enterprises (SMEs), will help them tide over the difficult period and be in a position to meet the demands of the market when things settle down.

Dubai’s real estate sector has been witnessing an upsurge over the recent past, particularly with the Expo 2020 Dubai having provided the required impetus to fuel demand in the market. According to leading property portal Property Finder, the emirate marked the highest number of sales transactions since 2008 in 2019. And alongside the trend to cater to the affordable segment of the market, Dubai has continued to focus on creating architectural landmarks, such as the Dubai Creek Tower, Dubai Eye at Bluewaters Island, Museum of the Future, One Zabeel, Meydan One Mall, Royal Atlantis Resort and Residence and Uptown Tower, to name a few.

As a trendsetter in the global arena, Dubai has been quick to adopt new technology such as 3D-printing, which has already earned it another accolade in the Guinness Book of World Records for having completed the largest 3D-printed two-storey structure in the world, with a height of 9.5 m, and spanning a total area of 640 sq m.

This latest accomplishment is in line with the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President, Prime Minister and Ruler of Dubai, to construct 25 per cent of buildings in the emirate utilising 3D-printing technology by 2030.

Local real estate developer Emaar Properties has followed the lead by announcing plans to build its first 3D-printed home at Arabian Ranches III in Dubai as a first step towards its ambition to be a leading adopter of advanced construction technologies.

On the sustainability front, Dubai Electricity and Water Authority (Dewa) is working to transform Dubai into a global hub for clean energy and green economy, to ensure the city gains recognition as having the lowest carbon footprint in the world. In line with these goals, Dewa is spearheading the development of the Mohammed bin Rashid Al Maktoum (MBR) Solar Park, which will be the largest single-site solar park in the world based on an independent power producer (IPP) model. The project is in line with the objectives of the Dubai Clean Energy Strategy 2050 to provide 75 per cent of Dubai’s total power output through clean energy, which will require a production capacity of 42,000 MW of clean and renewable energy by 2050.

 

The MBR Solar Park ... a Dh50-billion investment.

The MBR Solar Park ... a Dh50-billion investment.

Power & Water

Dubai’s ambitious plans for the MBR Solar Park have made remarkable headway particularly over the past year, with the 800-MW third phase of the facility expected to be operational shortly.

Upon completion, the solar park will have a capacity of 5,000 MW in 2030 involving investments of Dh50 billion.

Dewa is building the 800-MW photovoltaic third phase of the solar park in three stages, in partnership with Abu Dhabi Future Energy Company (Masdar), and EDF Group’s subsidiary EDF Energies Nouvelles. Work is currently nearing completion on the third stage of the third phase, which has a capacity of 300 MW photovoltaic technology.  The 200-MW first stage became operational in May 2018; and the 300-MW second stage became operational in August 2018.

The solar power projects currently operational in the MBR park have a capacity of 713 MW with planned capacity expected to rise to 1,013 MW this month (April).

Work is also in progress on the 950-MW Phase Four of the mega solar plant that will boast both concentrated solar power (CSP) and photovoltaic technology to provide clean energy for 320,000 residences and help reduce 1.6 million tonnes of carbon emissions annually, according to Dewa.  This phase includes the construction of the world’s tallest solar tower at 260 m and the world’s largest global thermal storage capacity of 15 hours, allowing for energy availability round-the-clock.

Phase Four of the project will use three technologies to produce clean energy, 700 MW of CSP – 600 MW from a parabolic basin complex and 100 MW from a solar tower; and 250 MW from photovoltaic solar panels.

Finally, the 900-MW fifth phase of the solar park will be built by a consortium led by Acwa Power and Gulf Investment Corporation. This phase is scheduled to become operational in stages starting Q2 of 2021. 

Among other projects in this sector, Dewa intends to build 68 new 132/11 kilovolt (kV) substations over the next three years, at a projected value of Dh8 billion.

The authority has also indicated its intention to construct floating solar photovoltaic plants in the Arabian Gulf.

 

The RTA has carried out a number of roads projects, including those to link Deira Islands.

The RTA has carried out a number of roads projects, including those to link Deira Islands.

Roads & Metro

Dubai’s Roads and Transport Authority (RTA) has completed several projects to ensure that the emirate’s metro and road network is world class and geared to tackle the influx of the millions of visitors that will arrive for the six-month-long Expo 2020 Dubai. Among its initiatives at the site, the RTA has started the trial run of an autonomous vehicle that will enable individuals to commute on a dedicated path from the main entrance to the staff offices.

Elsewhere in the emirate, it has embarked on major developments such as the Dh5.35-billion Shindagha Corridor Improvement scheme, a 13-km-long road network along Sheikh Rashid, Al Mina, Al Khaleej, and Cairo Streets that will be executed in five phases and is due for completion in 2027. 

The RTA has also embarked on a five-year plan for the improvement of metro and marine transport stations and their surroundings to enhance multi-modal transit integration. A key project open to investors is a multi-usage Transit-Oriented Development (TOD) project above the Union Metro Station to be developed on a public-private partnership (PPP) basis.

Key road projects completed last year include the tunnel and road works leading to the entry/exit points of Jewel of the Creek project undertaken in collaboration with Dubai International Real Estate.

Also in line with the Dubai Self-Driving Transport Strategy, which aims at converting 25 per cent of total mobility journeys in the emirate into driverless journeys by 2030, the RTA has signed an MoU with skyTran, a global company specialised in the development of suspended transport systems, to help develop advanced public transport facilities in Dubai.

The agreement involves developing Sky Pod units operated by ‘Maglev’ technology, which are characterised by their safety and speed as well as saving much of the resources associated with the daily mobility of people.

 

Nakheel Mall ... recently opened on Palm Jumeirah.

Nakheel Mall ... recently opened on Palm Jumeirah.

Real Estate

Dubai’s real estate market has demonstrated immense acumen in catering to the diverse requirements, tastes and budgets of investors from around the globe.  For instance, among its latest offerings are the most exclusive 15,127-sq-ft penthouse in Dubai – located at Serenia Residences on the crescent of The Palm Jumeirah – for a whopping Dh55 million; a variety of affordable homes in some of the up-and-coming neighbourhoods; and even homes that can be personalised, such as through Damac’s ‘A La Carte Villas’, the UAE’s first design-your-home concept.

It is no wonder then that Dubai registered a total of 41,988 real estate transactions in 2019, marking the highest number of sales transactions registered annually in the emirate since 2008, according to Property Finder.

The number of property deals during 2019 also marks a growth of 20 per cent in the volume of registered property sales transactions compared to 34,961 transactions in 2018, according to Data Finder, the real estate insights and data platform under the Property Finder Group.

The emirate’s real estate market has, therefore, grown by 260 per cent in the past 11 years in terms of the volume of transactions, it says.

This news confirms recent reports that the Dubai property market has been regaining momentum, especially after the formation of the Higher Real Estate Committee in September 2019 to rebalance supply and demand. The committee is said to have helped inspire market confidence, with both October and November 2019 having seen a record number of transactions – 4,774 and 5,037, respectively. December 2019 clocked in 2,989 registered property sales transactions.

The Valley ... a new Dh25-billion master development by Emaar Properties.

The Valley ... a new Dh25-billion master development by Emaar Properties.

Meanwhile, another leading property portal Bayut reported that property prices in Dubai’s popular areas continued to become more competitive throughout 2019 compared to 2018, resulting in both the number and value of transactions increasing for property sales in the emirate.

Popular freehold communities such as Palm Jumeirah, Dubai Marina, Downtown Dubai and Jumeirah Village Circle dominate the sales segment in the secondary market, added the 2019 End of Year report from Bayut.

Meanwhile, many developers in the emirate have been reassuring investors that work is progressing steadily on all their projects. For instance, Azizi Developments has set an ambitious target to complete almost 3,000 housing units across 10 buildings in some of its key developments across Dubai. Among its key projects is Riviera, a 71-building French Mediterranean-inspired master-planned community project in Mohammed bin Rashid City, which will see several completions this year (see Page 64).

Among developers in the market, Emaar Properties has dominated the Dubai real estate landscape. The developer of the iconic Burj Khalifa is seeing a great deal of interest for projects being built under its joint ventures with Meraas and Dubai Hills Estate. Meraas is a local developer responsible for projects like Bluewaters Island, La Mer and City Walk.

Emaar units were primarily sold in projects such as Downtown Dubai, Dubai Hills Estate, Dubai South, Dubai Creek Harbour, Dubai Harbour and Arabian Ranches 2.

Other top developers are Damac Properties, Nakheel, Dubai Properties, Azizi Developments, Seven Tides International, Danube Properties and MAG Group.

Damac’s largest community development project is Akoya, which welcomed its first residents within its ‘Claret’ cluster last July with a further   1,300 homes due to be delivered soon across other clusters within the 55-million-sq-ft master development. Other key developments by Damac are Aykon City, a $2-billion luxury mixed-use project, coming up on Sheikh Zayed Road; and Damac Towers by Paramount, a collaboration with Paramount Hotels and Resorts, which was topped out last October.   

Here is a selection of some of major real estate developments that have made headlines over the past year:

Burj Crown, a 44-storey luxury residential tower launched this year.

Burj Crown, a 44-storey luxury residential tower launched this year.

Uptown Tower: DMCC’s (Dubai Multi Commodities Centre) 81-floor Uptown Tower, the first super-tall structure in the Uptown Dubai district is on schedule for completion in Q1 2022. Work on the landmark development is reported to be 20 per cent complete. Uptown Tower will stand 340-m tall featuring 188 luxury hotel rooms and suites, Grade-A offices and 229 uniquely designed branded residences.

Uptown Dubai district will be a 24-hour neighbourhood featuring world-class dining, high-end retail outlets, a central entertainment plaza and hotels and leading businesses.

Burj Crown: Burj Crown – a 44-storey luxury residential tower located on the vibrant Sheikh Mohammed bin Rashid Boulevard with direct views of Dubai Opera and Burj Khalifa – was launched by Emaar Properties in January. Designed by leading Hong Kong-based architecture firm LWK Partners, the 440-unit tower offers one-, two- and three-bedroom apartments.

MAG City: MAG Development, the real estate arm of the UAE-based MAG Holding Group, broke ground on MAG City, its $2-billion mixed-use project located at Mohammed Bin Rashid City’s Meydan District 7. China National Chemical Engineering Group Company (CNCEC) has the contract for the construction of Phase One of MAG City.

MAG City will feature 5,100 housing units comprising studios, one- and two-bedroom apartments as well as 694 units comprising two, three- and four-bedroom townhouses, in addition to retail and other amenities.

MAG City offers public facilities with an area of 48,000 sq m, 8,000 sq m of retail spaces, and 84,000 sq m of public parks and green areas. The mega development is due for completion in 2022.

The Valley: Launched by Emaar Properties last November, The Valley is a new Dh25-billion master development on Dubai-Al Ain Road.

Running through the heart of this ground-breaking masterplan is a lush green ribbon of breathtaking landscape, connecting residents with vast open spaces and mega-amenities, inspiring the name: The Valley. The master development will feature expertly designed townhouses in addition to world-class amenities, nurturing a strong sense of community and family-friendly living, with retail, entertainment, recreational, educational and health facilities.

The first cluster of townhouses at The Valley, named Eden, is due to be ready in Q4, 2022 and will offer three- and four-bedroom villas.

Heart of Europe: Kleindienst Group, the UAE’s largest European property developer, expects to deliver key phases of its Dh5-billion Heart of Europe project this year (see Page 35).  The developer created quite a stir last year with its summer promotion that offered visa-free travel to Europe by offering Moldovan citizenship to anyone who invested in the project by last September. 

 

Other projects

Dubai will also host the first manufacturer of high-performance luxury sports cars in the Middle East when W Motors completes work on its automotive facility in Dubai Silicon Oasis, being set up with an investment of Dh370 million.

Another first for Dubai, Emirates Central Cooling Systems Corporation (Empower) has announced pilot operation of the world’s first unmanned cooling plant at Jumeirah Village Circle, with a total cooling capacity of 50,000 refrigeration tonnes (RT).




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