The overall buoyant real estate market sentiment in Dubai may get a few projects back on track in Dubailand, especially the entertainment components of these mega developments.
A real estate expert believes that if developers can make their entertainment projects in Dubailand “financially” viable without their residential and commercial components, it could be worth a try.
“It makes sense for developers to progress the leisure/entertainment component of their projects as this sector of the Dubai real estate market is currently performing better than other sectors such as residential or commercial,” Craig Plumb, Head of Research, Mena, Jones Lang LaSalle, told Emirates 24|7.
In May last year, Dubai Properties Group CEO Khalid Al Malik had called upon developers to fulfill their commitment by commencing work on the entertainment components of their projects in Dubailand.
Hotelier Middle East recently reported that the Saudi Arabia-based developer plans to resume construction on its halted Al Sahara Kingdom hotel and entertainment project in Dubailand next year.
The Al Sahara Kingdom has been master-planned over a 50 million square feet area in Dubailand.
The project is set to include two four-star hotels – to be run by Al Hokair-owned Mena Hotels & Resorts, an indoor theme park, restaurants, residential areas and a retail souk.
A senior official of a Dubai-based real estate company, on conditions of anonymity, told this website that they were planning to restart work on their multi-billion dollar project in Dubailand.
“We had put on hold our project in Dubailand, but now we do see an opportunity.
“We are in talks with our banks to get enough funds to restart our project. We will make the announcement soon,” he said.
In an interview with Emirates 24|7 last year, Al Malik said: “We are committed to providing infrastructure in accordance to our contract with the developers, but it is very important for the developers to actually deliver on their promises.
“The projects, agreed between us and them, had components of leisure and entertainment in conjunction with the residential components.”
He added: "It is only those who have actually developed the residential components are demanding infrastructure. We are asking ‘where is our component… where is Dubai’s component?”
Not yet the destination
Although Dubailand was pitched as an entertainment destination, it has not developed the critical mass necessary to make it an attractive destination for tourists.
“The challenge that developers face is that most leisure/entertainment projects are not financially viable without developing other real estate elements - this is why there are large amounts of residential and commercial space included in many of the entertainment projects in Dubailand,” Plumb argues.
But if they require large amounts of residential or commercial floor space to make the projects viable, then you would have to question these projects, he says, adding Dubailand faces “strong competition” for these uses from more centrally located projects elsewhere in Dubai.
Tatweer Parks, a subsidiary of Dubai Holding, told this website last year that they were in talks with Universal Studios and Merlin Entertainments Group for theme parks in Dubailand.
According to Dubailand website, future plans include City of Arabia, Palmarosa and Dubai Lifestyle City in addition to attractions such as Universal Studios and Legoland that will create a distinctive entertainment and lifestyle district in Dubai.
Currently, Dubailand attracts over 13 million visitors a year from the UAE and overseas.