The Emaar machine rolls forward

Strangest-story-of-the-week honours must go to Emaar with the news that its Economic City in Saudi Arabia is to be expanded by four times its original size – just over a week after the project was properly launched.

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By  Sean Cronin Published  October 21, 2006

|~||~||~|Strangest-story-of-the-week honours must go to Emaar with the news that its Economic City in Saudi Arabia is to be expanded by nearly four times its original size – just over a week after the project was properly launched.

Remember this was already the biggest new development ever conceived when it was just a measly 55 million m2 with the capacity to generate 500,000 jobs. Now it is a 168 million m2 project that will generate one million jobs.

The industrial component will cover 40 million m2 instead of 8 million m2. And the retail element of the development will now cover 8.7 million m2 instead of 3.3 million m2.

The ‘hospitality zone’ will go from 12,000 rooms in 60 hotels to 25,000 hotel rooms in more than 120 hotels. And the financial district has been more than doubled to cover 14ha of land.

You’ve got to feel for the model-maker working for architect RSP when he was given the news that his lifetime’s masterpiece was to be thrown on the skip and replaced with one four times as big. He’s still in counselling.

Emaar’s Economic City represents master-planned construction on a hitherto unprecedented scale and is a massive opportunity for the regional industry.

But a few questions first. Does this mean that there is sufficient projected demand for four times as much residential, commercial and industrial property within this currently empty expanse of sand, than initially thought?

Or does this mean that there is sufficient liquidity in the market for an IPO four times as big as the one originally launched?

I’d imagine ‘yes’ is the answer to that last one – given that half of Saudi Arabia’s population signed up for the first IPO a few weeks ago. Maybe the other half will have a punt next time round.

You also have to ask if anyone has actually undertaken a feasibility study into the viability of a mixed-use development on this scale? If so, was it done by a bloke called Dave, who also does removals?

And assuming Dave did go through due diligence, why did he get his numbers so patently wrong the first time?||**||

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