Dubai’s illusions of grandeur
At 828 meters, the Burj Khalifa stands tall and proud as Dubai’s prized landmark and the world’s tallest, possibly glitziest building; but behind the glittering façade is the sordid story of struggle and disappointment. And Dubai’s extravagant, ostentatious outlook might have something to do with it.
July 22, 2012 2:19 by Priyanka Pradhan
Seven months ago on new year’s eve, Dubai spent millions of dollars to stage a spectacular display of fireworks at the Burj Khalifa, presumably to position it as one of the world’s most dazzling (and dizzying) places to be at. The histrionics, which were broadcasted LIVE for the world to see, were replete with cinematography slick enough to put any major Hollywood production to shame. There was also this other achievement of having a renowned movie star scale the building in an action scene, a feat that put Dubai’s landmark in the spotlight yet again.
But apart from celebrities perched precariously atop the roof, enormous quantity of gunpowder and the ‘wow’ effect that lasted for all of ten minutes when the clock struck 12, there was little else the Burj khalifa could be ecstatic about. 2011, the year gone by, was marred with enough losses, empty spaces and dwindling interest from investors, to take the sheen out of Dubai’s most glamorous address.
Even now, halfway into 2012, about two thirds of the commercial units at the Burj Khalifa, more than 20 floors are still looking for takers. Real estate prices at the Burj Khalifa have plummeted from highs of $2,450 per-square-foot to around $721 per-square foot, offering a gloomy forecast for sellers and cautioning potential investors.
Apart from fact that the purse strings of multinational companies are tightly drawn, given the economic climate in Europe, companies are now apprehensive about investing in office space here in order not to appear too flamboyant, over the top and glamorous in these unstable times. Moreover, real estate prices have picked up by 10%, making real estate at the Burj Khalifa double the price of properties in the vicinity.
It’s high time the Dubai Government, which owns 31% of the building, does some damage control and by that, we mean, wake up from those illusions of grandeur and land on planet Earth with a hard thump. Yes, it is an 800 meter slide down to reality, but investors will come back once the Burj Khalifa wipes off that pretentious gloss, takes off those rose tinted glasses and gets down to business.
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7 Comments
Thanks for the blurb just to write something but this article is pointless in my opinion and all it is is a blurb of numbers for the sake of writing an article that will circulate because it is negative. Please add more perspective on what Dubai should be doing other than “wake up from illusions of grandeur” it’s easy to write that without having to work on the problem yourself.
Very well written BLOG, and Tariq it is the job of the government or perhaps an economist to decide what the country needs to do, not a journalist. How can we call articles like these useless? When the Firework display came on and there were hundreds of articles on that, how was that not useless? It was just a parade of nothingness.
At least articles like these poke a hole in the fantasy bubble and zip us back to reality. It offers perspective, which is all you can hope for. cheers
Thanks for your comment, Tariq. As a journalist, its not in my place to suggest policies or remedies to the government. It’s my job to report the facts, not to “work on the problem myself” so I’m afraid I’ll have to stick to doing just that.
This article should have been published 1 to 2 years ago as its very outdated and simply wrong. Commercial property has risen 10 to 15 % and rents about 25%. Government is back spending on infrastructure. Even Burj Dubai rents have increased, occupancy way up, etc.
Don’t think you have been to Dubai recently. Looks more like a copy and paste from an old article.
Totally wrong dear.
Thank for your comment, Rishi. The blog post is based on a news report by BBC, which is linked back and credited within the article. The story on BBC is dated 21 July 2012.
Appreciate the information you’ve provided. Thanks again.
Unfortunately the RE situation is more messy that the article shows. As a board member in one of the most important projects in Dubai, we face a nightmare on daily basis with a developer who is in permanent breach of contractual obligations, with its subsidiaries that act in conflict of interest and disregard the owners elected boards, and with a regulator that is not regulating. Unfortunately the situation will get worse before getting better due to investors frustrations and the “going no where mentality”
Priyanka, good article but maybe you should give some specifics to allow people who have superficial reading to understand what you are talking about. As an owner and board member in JBR I do understand. After 5 years we are still waiting for Strata Law to be implemented and developer to comply with his contractual obligations.