Tall towers make a comeback

11 August 2015

Developers are once again reaching for the skies in Dubai with towers reaching up to heights of more than 300 metres and costing hundreds of millions of dollars

Special Report Contents

  • Tall towers are back on the agenda for contractors working in Dubai as clients move forward with high-rise projects
  • The most recent is the 711-metre Dubai One tower in Nad al-Sheba
  • The local Emaar Properties has been the most active when it comes to developing new towers

No one understands the value of tall buildings better than Dubai.

Local developer Emaar Properties’ chairman Mohammed Alabbar has described that before the Burj Khalifa was launched in 2003, he proposed a 90-storey tower that was promptly dismissed by Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, who then was still the crown prince of Dubai.

Alabbar says he then commissioned a design that was more than 40 per cent taller than anything else in the world at the time. When he presented it again to Sheikh Mohammed, the answer was simply: “When can I see cranes on the site?”

Altogether, Dubai has 18 completed towers that are taller than 300 metres, with most opening between 2008 and 2013, as projects awarded during the emirate’s 2003-08 construction boom were completed. The most active contractors in the high-rise sector were Lebanon’s Arabian Construction Company (ACC), which has completed five 300-metre-plus towers, and Canada’s Brookfield Multiplex, which has finished four 300-metre-plus schemes.

High-rise focus

After three years of no new project launches, tall towers are back on the agenda for contractors working in Dubai as clients move forward with high-rise projects.

[The local] Emaar [Properties] has been the most active when it comes to developing new towers

The most recent is the 711-metre Dubai One tower that the local Meydan Group plans to develop as part of its 3.7-square-kilometre Meydan One scheme in the Nad al-Sheba area, which will also include a marina, a shopping mall, and the world’s longest indoor ski slope.

Meydan is also developing the 100-plus-storey Entisar tower. At the end of 2014, it awarded  Saudi Arabia’s El-Seif Engineering Contracting an estimated AED2bn ($545m) contract to build the tower, which will include serviced apartments, shops, swimming pools and garden areas. It will be built on Sheikh Zayed Road, next to the existing Fairmont hotel.

Emaar leads

Emaar has been the most active when it comes to developing new towers. Most recently, it awarded an estimated AED900m contract to build the Hills development in Dubai to Athens-based Consolidated Contractors Company (CCC).

Located off Sheikh Zayed Road overlooking Emirates Golf Club, close to Emaar Business Park, Dubai Media City and Dubai Marina, the scheme involves building a common podium with six towers. Four will be residential towers and the other two will be serviced apartments and hotels managed by the developer’s subsidiary Vida Hotels.

In numbers

828 metres Height of the world’s tallest building, Burj Khalifa in Dubai

711 metres Height of Dubai One tower in Meydan One project when completed

Source: MEED

In 2014, Emaar awarded ACC an estimated AED3bn deal to build the Address Residence Fountain Views development, which involves building three towers including a 220-metre-tall, 60-storey residential tower.

ACC also won an estimated $490m contract to build The Address Residence Sky View towers at the Downtown Dubai development last year. The twin-tower complex will have two towers that will be more than 230 metres tall and will link directly to the Dubai Metro and Dubai Mall.

Emaar also awarded CCC a deal to build the 65-storey Burj Vista towers in its Downtown Dubai district in 2014. In January 2013, it awarded Brookfield Multiplex a contract to build the Address The BLVD hotel and residential tower.

Burj 2020

Emaar is not the only firm developing high-rise schemes. Another upcoming tower is the Burj 2020. The project owner, the local Dubai Multi-Commodities Centre (DMCC), has approached contractors to discuss building the structure, which when completed will be the world’s tallest commercial tower.

Other high-rise projects are planned. The most high profile is the One Zabeel tower, which is being developed by the Investment Corporation of Dubai (ICD). In early February, ICD invited selected contractors to submit prequalification documents for the tower, which will be built in the World Trade Centre area. The building has been designed as a new landmark structure for Dubai, with Japanese firm Nikken Sekkei’s design being chosen ahead of proposals from at least three other leading international design firms.

The local Wasl is also developing an iconic structure. It plans to build a 60-storey tower close to the local Al-Fattan Properties’ new tower development off Sheikh Zayed Road, known as Wasl Tower. The scheme was approved by Sheikh Mohammed in February.

Nakheel projects

Local developer Nakheel is also working on high-rise schemes. In July, it received bids for a contract to build the Gateway towers project at the base of Dubai’s Palm Jumeirah. The first tower, known as the Tubular Tower, will be 261 metres tall with 61 storeys, including 46 above podium level with 520 apartment units. The Central Tower will be 211 metres tall with 49 floors and 429 apartments. The Beach Tower will be 205 metres tall with 48 floors and 313 apartments.

In November 2013, the local Arabtec Construction won a AED1.8bn deal for the construction of a mixed-use, high-rise tower on Sheikh Zayed Road. The 77-storey tower will be 369 metres tall and will offer more than 22,000 square metres of office space on 18 floors, and 908 square metres of retail area. It will also include a 350-room hotel and 83 serviced apartments, as well as 180 apartments.

Three high-profile tower contract awards in Dubai

Before the end of 2008, there were three contract awards on 100-storey-plus towers in the UAE. The largest and most high-profile award was made in December 2004, when Dubai-based Emaar Properties awarded a $875m construction contract for the 828-metre, 163-storey Burj Khalifa. The winning contractor was a joint venture of South Korea’s Samsung C&T, the local/Belgian Bel Hasa Six Construct and the local Arabtec Construction. The tower was completed in 2010.

In 2006, local developer Tameer awarded Lebanon’s Arabian Construction Company a $188m deal for the construction of the 413-metre, 101-storey Princess Tower at Dubai Marina. The project was completed in 2012.

Construction work on the 432-metre, 101-storey Marina 101 tower, which is now known as Dream Dubai Marina, restarted in 2012 and is expected to finish this year. Turkey’s TAV was awarded the $218m main construction contract in 2007.

The growing demand for affordable luxury high-rise units in Saudi Arabia

Just as Dubai’s Burj Khalifa is the centrepiece for UAE developer Emaar Properties’ Downtown Dubai district, Kingdom Tower will be the centre of a new commercial district to the north of Jeddah in Saudi Arabia. The first phase will cover 1.4 million square metres and will include the tower, a mall and a large mosque for 12,000 worshippers, together with other residential and commercial buildings.

The similarity in the two towers’ business models is no accident as Emaar advised Jeddah Economic Company (JEC), which is developing the tower, during the early stages of the project’s development.

JEC was formed in 2009 to finance Kingdom City. It is made up of Saudi stakeholders comprising Kingdom Holding Company, Abrar Holding Company, a businessman named Abdulrahman Hassan Sharbatly and Saudi Binladin Group. The tower was designed by US firm Adrian Smith+Gordon Gill. Saudi Binladin Group is the main contractor working on the project, with completion expected in 2018.  In February 2013, a joint venture of UK-based EC Harris and Mace was awarded a project management contract to oversee the development of the tower.

The Kingdom Tower project has driven significant growth in the supply of high-rise residential developments in Saudi Arabia as demand from residential tenants and investors has resulted in new high-rise developments in Jeddah, Riyadh and the ‘tri-city’ area of Dammam, Al-Khobar and Dhahran.

According to US-based Colliers International’s Modern Luxury: The Changing DNA of the Saudi High-Rise Residential Market report, the residential landscape has transformed over the past five years, from comprising primarily traditional residential high-rise towers to developers focusing on modern, luxury towers.

The focus on modern luxury means there is a growing gap for affordable luxury –  developments that maintain high standards while mitigating costs through simple design and efficient, smart buildings.

“The strong demand for modern luxury high-rise residential properties across Saudi Arabia is being demonstrated by high absorption levels among existing towers and pre-booking among forthcoming supply,” says Imad Damrah, managing director for Colliers International in Saudi Arabia.

“While there is clearly a fundamental change occurring in this market segment, developers need to pay close attention to demand characteristics. Those developers with a strong reputation of delivery, and partnership with iconic brands and commitment to luxury design, fittings and finishes will be best-positioned to capitalise on the market opportunity. Furthermore, we see a clear gap appearing in the mid-market segment, which is showing signs of undersupply, given the overall shift in the market.”

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