Further FDI predicted after USD1bn landmark real estate deal between US private equity firm and Dubai Government
- United Arab Emirates: Monday, October 03 - 2005 at 13:39
- PRESS RELEASE
The UAE - which currently attracts just over 25 per cent of the GCC's foreign direct investment (FDI) - can capitalise on recent real estate deals with Western companies to ramp up inbound funds, according to one of the principal market players.
Wride said: "The launch of RiverWalk demonstrates how a privately held American company can successfully negotiate groundbreaking land development terms with Gulf state officials.
"The Dubai government has been very supportive of our efforts and has been vocal in encouraging mutually beneficial agreements that serve to attract foreign direct investment.
"At present, there is very little international capital flowing into the region - and the funds will start to come with the relaxation of trade barriers and the higher levels of governance implemented by Dubai International Financial Centre (DIFC) and the newly-formed international stock exchange, the Dubai International Financial Exchange (DIFX)."
The Middle East currently attracts less than 1 per cent of the estimated world pool of FDI funds, according to Dr Omar bin Sulaiman, the director-general of DIFC, who recently told the World Economic Forum that the GCC countries "are investing significantly more in other countries outside the region than they are receiving".
The GCC attracted $1.81 billion of FDI in 2003, compared with $7 billion in the wider Arab region. According to the United Nations Conference on Trade and Development, $480 million of those figures flowed into the UAE, primarily into its capital city Abu Dhabi.
Wride explained: "Dubai's real-estate boom will continue to be instrumental in securing regional investment into the city, but we believe the RiverWalk case study will encourage other investors outside the Middle East - including in North America - to use Dubai as a channel for their investment portfolios."
In July, Capital Partners signed an agreement with Dubai Technology and Media Free Zone (TECOM) - part of the government body Dubai Holding - to develop RiverWalk, a signature $1 billion project to be built in Dubai Internet City. The 38-acre, mixed-use development has been planned in agreement with the government of Dubai
Capital Partners is the first non-UAE or GCC national private group that has been given the privilege by a government institution to develop a master development in the Emirate of Dubai and will be the first group to sell freehold residential and commercial property in the free zone.
"As Master Developer, we have the ability to enter into joint ventures with reputable partners on the development of the project, which is a tremendous advantage," Wride added.
RiverWalk is a mixed use development in the heart of "new" Dubai. The project will be a car-free environment and will include more than 5 million square feet of residential apartments, offices, boutique shops, galleries, cafes, a 300-room Courtyard by Marriott hotel and 120 Marriott serviced apartments.
Phase One of the total development is currently underway and consists of 1.5 million square feet of residential and commercial space with freehold sales activity commencing before the end of the year.
Todd C Thiel, managing director, said: "Based on the wide amount of interest we are receiving and the speed of the local market, we are expecting very strong sales, both to investors and direct to the consumer.
"We anticipate that the potential to actually own property - whether apartments, or office space - in one of the region's fastest-growing free zones will add a new dimension to Dubai's flourishing real estate sector.
"The terms of our agreement with the government of Dubai provide advantages that will offer additional safety mechanisms to owners. When details of these are revealed, we believe this will create an additional catalyst to the already brisk response in the marketplace."
In brief: the RiverWalk project
Plans call for RiverWalk to have waterways flowing through the development, with a central island of restaurants, galleries, studios and boutique shops as a key attraction. The Courtyard by Marriott and Marriott serviced apartments will be a key element of the project, in addition to the tower to be constructed along Sheikh Zayed Road, the city's main arterial road.
Wride explained: "Creating a 'walkable', liveable environment was essential. RiverWalk was designed with the overall aesthetics of the area at the forefront of consideration.
"For example, we will not allow surface parking to mar the appearance of the project; and landscaped green areas will provide space and breathing room for residents. The project has been designed on the principles of New Urbanism - creating improved quality of life through diverse, walkable, mixed-use developments," he concluded.
The entire RiverWalk project will consist of three phases of development. DAR Consult is the designer and architect, and Al Habtoor has done all the enablement work to date.
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