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As more and more big name developments in Dubai get the chop, Kipp is pleased to see the lessons of the real estate crash seem to be sinking in.
February 3, 2011 2:12 by Eva Fernandes
Kipp doesn’t like repeating ourselves, but in the Groundhog Day Gulf we generally don’t have a choice. And recent developments (or lack of, so to speak) had us thinking about an article we wrote two week backs about the end of Dubai’s brash vanity developments.
At the time, we were writing about ACI (Alternative Capital Invest) going bust. ACI was behind developments named after celebrities including Formula One legends Michael Schumacher and Niki Lauda and tennis champion Boris Becker. Though by declaring bankruptcy of several of its funds ACI did not necessarily abandon the Michael Schumacher Business Avenue, Boris Becker Business Tower or Niki Lauda Twin Tower, the projects have been halted indefinitely. And as ridiculous as celebrity endorsed avenues sound, the awful track record of ACI was actually even more ridiculous: out of the 17 projects that the company started it hadn’t successfully completed even one. This kind of flagrant disregard for practical and realistic developments was characteristic of the Dubai property boom and consequently the reason for its crash – the repercussions of which we are still only beginning to see.
Take, for instance, the announcement earlier this week from Dubai Properties of the suspension of the Tiger Woods golf Resort, which was to be a high profile golf resort that was supposed to have 292 residential plots for palaces, mansions, luxury villas and golf villas and an 18 hole golf course. Dubai Properties said that when and if the property market bounces back they will continue work on the project but for now the big-name-resort is on indefinite pause. Was it one of the repercussions we just mentioned, or was this project, like ACI’s, another example of the over-ambitious plans that fuelled the boom?
And then at the end of the week, Nakheel announced that it has decided to cancel plans to build the Trump International Hotel & Tower on the trunk of the Palm Jumeirah in Dubai. Nakheel chairman Ali Rashid Lootah conceded, referring to the company’s previous super-duper projects including the construction a 1 kilometer tall tower: “We have to be realistic about these projects now. There is no market demand for them. We will be selective.” About time, thinks Kipp. So instead of the flashy Trump hotel and tower that had been planned, Nakheel intends to develop a much lower-profiled and more practical shopping centre there instead.
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