Real estate giants go global

They have built it, and they have come, and now countries throughout the region are buying into the Dubai ‘field of dreams’ development philosophy. The vision of Dubai is being increasingly marketed overseas as developers spread the real estate gospel in Morocco, Syria, Qatar, Egypt and Saudi Arabia.

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By  Sean Cronin Published  January 14, 2006

Most of them have been in existence for less than a decade — but in that time they have grown to be counted among the largest development companies in the world. Now the heavyweights of Dubai’s property development sector are exporting their winning formula overseas to countries that are desperate to emulate the success of the emirate. Their brands have become synonymous with audacious record-breaking and headline-grabbing projects, and more and more countries in the region want to tap into that success. It has not only allowed some local developers to grow into multi-billion dollar companies in only a few years, but has also allowed them to export the winning Dubai real estate formula to other markets. And that is exactly what several local developers have started to do in the last six months, with more overseas expansion planned in 2006. Emaar is the world’s number one real estate company in terms of its market capitalisation, which is over US $40 billion. Its profits for the first nine months of last year climbed a whopping 255% to more than $1 billion. Rival Nakheel does not disclose details of its financial performance, but has around $12 billion invested in UAE projects. Leading the international charge has been Dubai International Properties (DIP), which is the real estate arm of Dubai Holding — the holding company for the assets of the government of Dubai. Despite the fact that it has only been trading for just over one year, the group has already launched several overseas projects worth billions of dollars. The company launched its $272 million Dubai Towers Doha project in Qatar last February, and the following month announced plans for a $817 million resort complex at Yiti in Oman. In May of last year, the company revealed plans for the $2 billion Amwaj resort development in the Moroccan capital of Rabat and in October it unveiled the $545 million Dubai Towers Istanbul project. Chief executive Farhan Faraidooni, said: “The studies conducted before launching DIP indicated tremendous growth opportunities in regional markets. “This encouraged us to launch real estate projects in the region which had positive repercussions on the local economy and at the same time enabled DIP to break into new markets.” Dubai-based retail developer Majid Al Futtaim is also cashing in on demand for the winning retail development formula of shopping centres like Deira City Centre and the recently opened Mall of the Emirates. The company’s most recent international expansion was in Egypt, where it formed a joint venture called Oasis Capital Egypt. MAF is also exploring development opportunities in Syria and Iran. The biggest Dubai-based player to have spread its wings on the international stage is Emaar, which announced the $4 billion Cairo Heights project in Egypt last August and followed it up with the $500 million Damascus Gate residential scheme in Syria. More recently, Emaar teamed up with Moroccan industrial giant ONE Group to develop a string of residential schemes in the country — including the $327 million Amelkis II luxury residential golfing complex in Marrakech. But its latest and most ambitious overseas project is King Abdullah Economic City, thought to be the single largest private sector investment in Saudi Arabia. Construction has already started on the $27 billion-plus project, which is located on the Red Sea, north of Jeddah. A massive 55 million m2 of greenfield land with a 35-km shoreline has been earmarked for the master development. “In the past decade, Emaar Properties has built experience and knowledge on how to transform the power of ideas into reality,” said Emaar chairman Mohamed Ali Alabbar, following the announcement of the project. With more regional countries looking to adopt the Dubai strategy of economic diversification, that ability to transform ideas into reality will be in greater demand than ever in 2006.

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