Dubai’s artificial, palm-shaped isle takes root

Many observers believe Dubai’s frenetic homebuilding will soon outstrip demand.

“We’ve still got a shortage of properties in Dubai, but that’s likely to become an excess in the next six or 12 months,” said Steve Brice, an economist with Standard Chartered Bank in Dubai.

Brice said year-old estimates that 50,000 housing units would hit the market in 2006 will be more than doubled. Nakheel, one of three big developers here, has said it will release 60,000 units in the 2nd half of 2006 alone.

Three other islands
Nakheel’s two copycat Palms, the Palm Jebel Ali and Palm Deira, have also been delayed by design changes and other factors, Kazim said. A nearly finished fourth Nakheel archipelago, shaped like a map of the world, has attracted few buyers and remains mostly unsold.

Kazim said The World’s sales trouble stems from simple economics: Nakheel is selling empty islands for tens of millions of dollars only to builders promising low-density luxury.

Dubai’s government expects the Palm Jumeirah to become a signature tourist attraction, bringing in as many as 20,000 daily visitors, Kazim said.

Meanwhile, laborers living in a cruise ship moored offshore are scrambling to finish enormous concrete houses that are crammed together on the palm island’s 17 “fronds.” The fronds are narrow peninsulas as long as a mile, attached to the island’s main trunk. Nakheel will hand keys to owners of 1,350 homes by Nov. 30, Kazim said.

Also nearing completion are 2,650 apartments in 20 high-rises that have sprung up on the island’s trunk. The hulking complexes are visible from shore, where the sprawling island, with its dredges, highway overpasses and construction cranes has become a major eyesore for resort hotels on Dubai’s once idyllic natural beaches.

Even after the handover in November, less than half of the island’s construction will be finished. Kazim said the project won’t be done until nearly 2010, if things go according to Nakheel’s current schedule.

The 1,500 room Atlantis Hotel is already under construction by South Africa and Dubai-owned Kerzner International, and is expected to be finished in 2009. The hotel will be similar to its Atlantis hotel in The Bahamas.

A redesigned Trump Hotel and Tower on the island is also expected to open sometime in 2009, Kazim said.

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