Emerging Trends
The events of the last twelve months have led to a number of experts – from real estate advisors to financial institutions – to speculate and try to explain the timing and nature of the market’s recovery as they decipher the statements issued by developers. In the meantime, people have started to live, work and play in new communities that were only visions at the time of the last GRES.
Fact Or Fiction – The Credibility Crisis
Much of the angst voiced and documented over the past year has centered not only on the falling prices of investments but also on the continued ambiguity of project progress and completion dates. The shifting completion target dates coupled with the reluctance of developers to commit to a definite time scale has resulted in the diminishing of their brands’ credibility.
Real estate brands are now faced with the same issues of trust as the credibility crisis suffered by financial institutions in the aftermath of the global economic crisis. This sentiment has affected the entire sector regardless of individual performances and past records.
Emaar remains a highly regarded brand in the region. Despite the global downturn and some international downsizing, it still delivered significant retail and hospitality offerings in 2009. However, the rescheduling and renaming of the world’s tallest tower from September 9, 2009 to December 2, 2009, and eventually to January 4, 2010, raised eyebrows in a market looking for any signs of trouble and eager to assume the worst.
Regaining credibility and trust will be the major issue in the upcoming year as brands look to correct their course and adjust to the new realities.
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“Our projects in Dubailand are ongoing as planned. Nothing has changed.”
Mohammed al Habbai, Senior VP of Dubailand 84
Ambiguous
“This year we will be revisiting our operations. Revisiting depends on many parameters and the world financial problem also dictates that … we have to look into phasing of the project and timing of the project.”
Salem Al Moosa, Chairman and CEO of Falcon City of Wonders 85
“We remain committed to our projects and optimistic about the long-term outlook for the real estate sector. Most of our developments are long-term, large-scale projects, constructed over eight years on average, so we can adjust the pace of development taking into account market conditions, which will inevitably fluctuate in that time.”
Limitless on Arabian Canal 86
“Shifting away from the fast-track development of its Jumeirah Gardens project and in light of rapid change in the real estate market and global economic conditions, Meraas Development is now focusing on adapting its master plan, designs and product mix to suit market conditions.”
Meraas statement 87
Cancellation?
“The tower [Nakheel Harbor & Tower] will be delayed until the market changes. You can’t build something like that in this kind of market. Whatever is under construction will be continued. Whatever is planned will be shelved, delayed. Anything committed to we shall finish; everything that cannot currently be financed will be delayed.”
Sultan Ahmed bin Sulayem, Chairman of Dubai World 88
“I am hoping we can restart work on the project within the next two years, but it all depends on the market situation. At the end of the day, the ball is in Nakheel’s court. You’ve got to see what the market demands, and restarting a project of that nature in this region at this stage doesn’t make much sense.”
Donald Trump Jr., on the status of Trump Tower 89
From Concept To Completion
By the end of 2009, you could watch the reflection of the rising sun on the world’s tallest tower. You could live, dine and relax on a man-made island in the shape of a palm tree. From the backyard of your luxurious villa, you could watch the world’s top 60 golf players compete in a season-ending tournament. From the deck of your yacht, you could toast the Abu Dhabi F1 Grand Prix Champion under a night sky bright with the colorful illumination of a newly built hotel. Families could enjoy a walk along the new boardwalks that fringe the coastline and seek shelter from the summer heat in megamalls. Nowhere else in the world could all these destinations and events be built from scratch in such a time frame.
In a region where the change from new to old is measured in months rather than years, it is easy to lose sight of these monumental feats. With each completed project and each home handed over, the successes of the region’s real estate market provide a counter argument to the critics and skeptics.
As new communities start to live, work and play in what once was merely a vision, the role of the destination brand must evolve from promotion to engagement. The criteria for long-term success will now be the building of strong community brands – not just iconic structures. Brands that promote their neighborhood identity while forming strong connections to their immediate surroundings will instill a sense of pride and ownership for the residents who will become ambassadors for these new communities.
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