Construction Week Newsletter 18th September 2004

The word ‘waterfront’ was not a much-used part of the lexicon in the Gulf, or even the wider Middle East, just half a decade ago.

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By  Eudore Chand Published  September 18, 2004

Editorial Leader|~||~||~|

Glamour boys show the way to future growth

The word ‘waterfront’ was not a much-used part of the lexicon in the Gulf, or even the wider Middle East, just half a decade ago. It existed, buried in the dictionaries, but was not on the tongues of the Arab people. Now it is a rage, particularly in the Arabian Peninsula. Every developer worth his salt wants to build a waterfront project – and if water is not available inland, lets get it via channels and subterranean tunnels, as implementer of visions, Nakheel plans on doing with its inland Jumeirah Lake Towers project. And, of course, every resident of the Gulf nowadays dreams of living in a waterfront property. Waterfront projects have mushroomed bringing glamour to an industry known for hard hats, heavy boots and striking yellow/orange or blue overalls. With the cleverly managed hype promoting and supporting the upscale, high-profile image of ultimate luxury, waterfront projects have swept the more mundane facets of property development - such as construction - along to higher levels of public perception. Obvious pride is reflected when a construction worker mentions that he is working on, say, The Palms or the Dubai Marina or Jumeirah Beach Residence. Waterfront projects are not new to the region; only they may not have been known as such. Emaar Properties of Dubai, with its launch of Dubai Marina, inspired the new fashion-image in recent times. It was in the late nineties that media in the Gulf heard the word ‘waterfront’ and started using and promoting it. Once Emaar had popularised the concept, there was no stopping other developers – in Dubai or the UAE and even abroad. The ripples had spread. In Dubai, Nakheel went the exceptional way of building two huge palm-shaped islands and a gigantic world map in the waters off Dubai. Others like Jumeirah Beach Residence came up with perhaps the world’s largest single-phase freehold property development along 1.7 km of in-city beachfront. Waterfront projects have mushroomed all over the Gulf. More are planned further away as Beirut’s Marina City Liban and the Nile City in Egypt. It is not only upscale living that waterfront projects offer, making them extremely lucrative to developers. They also have a significant impact on the country or state they are located in. Apart from bringing in world-class technology and expertise from international designers, contractors and other property development specialists, waterfront projects are a major means of attracting foreign investment, as Dubai has so clearly shown. The third most obvious benefit is that waterfront projects provide significant support in the promotion of tourism, especially water-based sports and entertainment. Of late, tourism has been identified as the key driver of growth in many Arab countries. And as government policy starts to get translated into action, we could expect to see more and more such projects come on to the drawing boards. The construction boom of recent years could look forward to be fed by a steady stream of high-profile projects across the region in the foreseeable future. Care, however, must be taken to keep the risk profile in mind. Waterfront projects are vast and require huge financial commitment. Nakheel alone has projects worth some US $12 billion in hand. With this kind of money involved, costs and returns need to be worked out very carefully and all possible scenarios and contingencies need to be built into the planning. Outside factors such as the recent hike in steel and cement prices may have passed the developers by who insisted on contractual obligations of the contractors, but a hurting contractor is not an ideal partners in a high-risk project. Today it is a sellers market; tomorrow it may be a buyer’s. Cavalier attitude in building is never recommended, neither in a small project, nor in the big. Sums need to be done well and carefully and double checked and then checked again. After all, a lower quality than promised development or even a concrete skeleton of a delayed project, does no good to the people associated with it or to the host country.||**||

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