Over the past four years, DP has launched a string of megaprojects that are all aimed at filling gaps in the emirate’s project portfolio. Today, the company’s projects comprise suburbs, business parks and cities, with office buildings, residential towers, villas, apartment complexes, labour camps, and one of the region’s largest masterplanned developments: the $54bn Mohammed bin Rashid Gardens.
By focusing on Dubai, the company has managed to remain financially strong and avoid the costly overseas adventures that have hindered the progress of other Dubai-based developers. “We have a very strong position financially,” says Hashim al-Dabal, executive chairman of DP. “All the projects are self-financing; there is no debt.
Value of projects: $95bn
Revenue (2007): Not available
Net income (2007): Not available
One advantage we have is that we have not expanded internationally. Other companies that have expanded internationally have required funding, and that gave us the advantage when it came to being strong in the UAE.”
The company was created when Dubai Holding was formed in 2004 out of an organisation that was known as Estithmar Real Estate, which at the time was managing the Jumeirah Beach Residences (JBR) project.
Once launched, DP quickly added to JBR by launching the Business Bay project. The $20bn scheme was aimed at bridging the growing shortfall in office space around the city, by creating a central business district adjacent to Emaar Properties’ Burj Dubai. Once completed, the scheme will have about 150 waterfront towers on 6 square kilometres of land, along 11.4km of new waterway. The first towers are expected to open in 2009.
Business Bay will be connected to another Dubai Properties’ project, Culture Village, which will be built on the banks of the existing creek in the Al-Jadaf area. It comprises a harbour, a cultural and exhibition centre and a wharf development, together with hotels and residential buildings.
But Business Bay and Culture Village were just the first of Dubai Properties’ megaprojects. Its largest to date is Mohammed bin Rashid Gardens. Launched this year, it will create 88 sq km of suburbia in parkland areas between Emirates and Al-Khail roads, of which about 60 sq km will be green space.
Vast expansion of gardens and greenery in the desert may appear overly ambitious and an unnecessary drain on the emirate’s limited water resources, but Al-Dabal says it is feasible. “When we thought of this project, we addressed those challenges,” he says.
“We will focus on greenery that does not require water alone, the kind that you see in oases. The problem is that people move to the cities and they forget about these trees. A good example is Al-Maha. Where it is protected, you will see a lot of local trees such as the ghaf.”
The indigenous vegetation will be complemented by more traditional landscaping, such as that found at Jumeirah Beach and Al-Mamzar parks, together with indoor botanical gardens. “These three things will create a green city,” says Al-Dabal.
The final steps in the planning process are now being completed before construction can start. The masterplan was recently approved by Dubai Municipality, and plans for roads and other transportation systems are being finalised with the Roads & Transport Authority. Infrastructure works are expected to start on site in early 2009.
“We have learned lessons in the past, with major projects such as Business Bay, not to get engaged with third parties like contractors, customers and local authorities before we make sure that the plots available have no problems, such as cables and other services,” says Al-Dabal.
Mohammed bin Rashid Gardens is not the only multi-billion-dollar project DP has launched in recent years. It is working on the $14.9bn Mudon project in Dubailand, which will create an integrated residential and commercial development providing housing for 45,000 people living in five districts, reflecting the architecture of Baghdad, Beirut, Cairo, Damascus and Marrakech.
The project is under construction, but homes have yet to be offered for sale. “We have changed our strategy and our method of approaching the target market or consumer,” says Al-Dabal. “No longer will DP use off-plan sales before construction.”
With off-plan sales off the agenda, delivery is now the company’s key focus. Over the next five years, it expects to award $41bn worth of construction contracts. In 2008, it will make awards totalling $4bn, and in 2012, this number will have grown to $11bn.
Other projects that are under construction include Mirdif villas, which when finished will have 42 three-storey apartment buildings and 250 villas, and the Tijara Town business park in Dubailand, which comprises more than 100 low-rise office buildings. In Al-Quoz Industrial Area, it is building 32 eight-to-nine-storey labour accommodation buildings.
To date, DP has completed 25,000 units: more than 20,000 apartments, almost 2,000 villas, about 1,600 hotel rooms, 280 offices and 192 retail and leisure units. Another 8,500 units will be completed in the next two years.
Without launching any new projects, DP has at least 10 years of development work still on its books. Any further projects will simply extend the workload as Dubai continues to create more real estate opportunities. “We have a big portfolio that will keep us busy for the coming 10 years,” says Al-Dabal.