Road to Recovery, Part I
Come on – it wasn’t all bad. The crash of 2009 put the Gulf economies on a more solid footing, reports Trends magazine. Part I.
November 18, 2009 3:42 by Scott MacMillan
Or to take a more recent example, the “travel news” section of The Times newspaper recently reported – on tenuous grounds, citing a single unnamed property agent as its source – that Nakheel’s landmark island chain development The World had been “canceled,” the quoted source adding that the man-made archipelago “doesn’t even look like the world” and that most of it resembles “a pile of muck.” The suicide of the buyer of Ireland was offered as further evidence of The World’s apparent failure.
Never mind Nakheel’s assurances, published in the Dubai daily the Khaleej Times, that it has already handed over 33 islands to buyers, or the recent report in Arabian Business that Safi Qurashi, the British property developer who bought the Great Britain island for $60 million in May 2008 started building on it immediately after Ramadan. The World, rightly or wrongly, has become yet another symbol of Dubai’s folly.
The case of Nakheel is emblematic of the rush to judgment in a situation more nuanced than most boosters or detractors would have it. Like many Dubai developers, Nakheel is a troubled firm. Its bonds and sukuk (Islamic bond) certificates were trading at levels that resembled junk bonds earlier this year, with yields reaching as high as 85 percent at one point. Several developments have been suspended before they even began, including another man-made island chain slated to surround The World called – what else? – The Universe, announced at the boom’s tail end in 2008.
Other projects have been subjected to little or no scrutiny. Take Dubai Promenade, for instance, a million-square-meter waterfront development adjacent to Dubai Marina, notable for the building depicted on promotional drawings which resembled a donut standing on end. It was clear to anyone who visited the construction site in the spring that work had come to a halt.