One year after the collapse of US investment bank Lehman Brothers triggered a global economic slowdown, the Middle East’s real estate developers are once again tendering a series of tall tower schemes.
But the projects of 2009 are very different from those of previous years. The biggest change is that Dubai is only awarding a handful of contracts. Instead, most of today’s new tower projects are being built in other Gulf cities, such as Jeddah, Doha and Riyadh.
The second crucial difference is that, with the exception of Kingdom Holdings’ planned 1-kilometre-tall tower in Jeddah, almost all the tall towers planned are relying on government funding. They include the new Capital Market Authority headquarters in Riyadh and a similar building in Doha for Qatar National Bank.
It is no coincidence that it is clients in Saudi Arabia and Qatar rather than Dubai that are willing to launch skyscraper developments.
The parlous state of many private sector real estate firms means they are unable or unwilling to invest. In their place, support from financially strong governments is crucial to get projects moving. That is why projects in energy-rich countries can move ahead while schemes in Dubai stall.
In early September, Lebanon’s Arabian Construction Company won a contract to build the 618-metre-tall Pentominium tower at Dubai Marina. That award could well be Dubai’s swan song when it comes to skyscrapers.