‘New laws will bring stability’
Dubai Lifestyle City (DLC), part of ETA Ascon Star Group, will repeat the “lifestyle city” concept on an island on The World at cost of $250 million (Dh917 million).
“It’s a small project and will be developed on a 500,000 square feet island on The World. It will have a hotel, which is most likely to be operated by JW Marriott Hotels and Resorts, and some houses,” Arif B Rahman, Managing Director, Dubai Lifestyle City, told Emirates Business.
The Dh2.5 billion Dubai Lifestyle City, which covers an area of more than four million square feet in Dubailand, was officially launched by tennis player Maria Sharapova in November last year.
The development comprises 68 Tuscan-themed villas and 120 apartments, one four-star 150-room sports hotel, one five-star 170-room hotel with a 20,000 square feet spa, and sports training and recreational facilities. These include a Nick Bollettieri Tennis Academy and a David Leadbetter Golf Academy, and a sports medicine centre.
Florida-based IMG Academies and JW Marriott, one of the world’s largest hospitality groups, are partners in the project.
DLC will have a 100,000 square feet shopping mall, eight restaurants and a modern digital data centre to manage all communications systems within the development.
Tony Ashai, a celebrated Beverly Hills designer known for working with celebrities such as John Travolta and Paris Hilton, has conceived the design for the villas and apartments. The project is expected to be ready and complete by September 2009. Rahman tells us more about the project.
How much of Dubai Lifestyle City has been sold and how is the work on the project progressing?
We have already sold 50 per cent of the lifestyle city to a mixed bag of customers. People of Indian origin from the United Kingdom, South Africa and UAE, Russians, GCC nationals and Europeans have bought property in the project.
We have completed the grading and site clearing work. Soon we will be awarding the infrastructure package to one of two contenders and an announcement of that will be made by the end of the week.
Will you be replicating the concept in other countries?
Dubai Lifestyle City is our first project and it is being executed in the UAE. We do plan to take this concept to India and other GCC countries from where we are getting a lot of inquiries about the project.
Moreover, people are asking us to replicate the software – operator tie-ups, architecture, etc. We might give or sell this know-how to other developers.
Is ETA Ascon’s contracting division likely to participate in the construction work as well?
Right now, ETA Ascon is not executing any work. They may participate later as more packages will be awarded later.
Do you believe there is an urgent need for the UAE to harmonise property law?
Dubai Government is doing it in a very methodical manner. Real Estate Regulatory Agency was a great step forward, which was followed by the escrow account law. The whole idea behind it is to give security and comfort to buyers.
Have you opened an escrow account for DLC?
Yes, of course. It is a must and not a question of choice. And everybody has to eventually do it. The very idea behind it is that the developer is not using money that comes in for other projects. Although there are no benefit as such, it brings transparency and all have to disclose everything to the bank.
So do you mean real estate companies were not transparent before?
There was no regulation to be transparent, but now with the new laws coming in, things will be more regularised. The laws are certainly a move to restore confidence among the local and foreign investors.
How much funding do you require for the project and how are you raising it?
As every property developer does, we are using a combination of money from pre-sales and project finance. An international bank has already sanctioned term-loan facilities for our project.
Has the high cost of construction and labour hit your bottom line?
Inflation is hurting us very much as we have to import all materials. The dollar is sinking “more and more” and the purchasing power of the dirham is getting “poorer”, which is adding to further inflation.
Has it lead to any cost escalation for lifestyle city?
There is cost escalation, however we are committed for deliveries. The cost has already gone up by 10 per cent. We can’t control external factors and have to live with them and because of all this prices for our villas and condos have moved up by 15 per cent since our pre-launch date.
What matters at the end of the day is that we give a quality product for our consumers. It is the assurance what our buyers seek and they have that. We are committed to delivering what we have promised.
What value addition does JW Marriott bring to this project?
The presence of JW Marriott in running the show is expected to set high standards in operations and services. As part of the agreement, all the villas and villettes [small villas] will be branded as JW Marriott Residences and the hospitality company will take care of the full gamut of the house keeping operations for residents who choose its services. The villas and villettes at the project will be the first JW Marriot branded residences anywhere in the world.
Besides, they will run three separate lodging facilities – 170-room JW Marriott Hotel, the 152-room Courtyard by Marriott and the 46-unit Marriott Executive Apartments – to cater to the requirements of the visitors from all over the world to the city.
Do you believe in incorporating high-end technology in your apartments?
The whole project will be e-enabled, which means it will be called a “digital city”. This is the first time in the world that Microsoft is doing a project of this nature. They have provided tech support for individual homes but never for a whole community.
Once the digital integration of the project is complete, every home will become a high-speed network. Besides, all the entities within the project will be digitally connected to one another, making DLC a truly integrated lifestyle enclave.
Shuaa Capital expects high-end apartments, outside the emerging downtown Dubai area, to see a price correction in the range of 15 to 20 per cent. What do you foresee?
It’s like the Rolls-Royce. How many people buy it? But still demand for it doesn’t go down. We are an ultra-luxury project and are targeting people who have disposable incomes or are looking for secondary homes. These are businessmen, investors and people who very much believe in the growth of this country.
Is Maria Sharapova a brand ambassador for your project?
She wasn’t a brand ambassador for us. But she was the reflection of what the lifestyle city is about – fame, wealth and a feeling of being a celebrity. Moreover, she is the prodigy of the IMG Academy.
So did your company give her a villa?
We are a private company… and not the government.
Investment banks and property consultants point to rising delays in completion of various projects. What do you have to say?
Projects that are coming up on reclaimed areas and islands might be delayed, but ours is a desert site. So we don’t foresee any such external challenges. However, getting quality contractors today is becoming more and more challenging.
Do you feel the property market bubble will burst?
The property market is going to remain hot looking at the current oil price. It is still cheaper buying property in the UAE than in most of the countries. Even at today’s rate, it is cheaper to buy property in Dubai than Singapore and Japan.
- All residences and hotels inside Dubai Lifestyle City will be JW
- The Nick Bollettieri Tennis Academy and David Leadbetter Golf
- A shopping mall covering 100,000 square feet will cater to the
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