DMCC CHAIRMAN STUDIES OPTIONS FOR HIS UPTOWN DUBAI PROJECT
▶ Bin Sulayem says partnerships with ‘big players’ or self-funded venture are possibilities
Dubai’s DMCC is considering options including raising funds or partnering with multinational investors to build Uptown Dubai District, a 10 million square feet extension of one of the world’s biggest free zones that will include two super-tall towers, its executive chairman said.
DMCC, the master developer of Jumeirah Lakes Towers (JLT) development and a hub for trading of everything from tea and diamonds to derivatives and commodities, may decide to fund the entire project from its own balance sheet, Ahmed bin Sulayem said, without naming the firms DMCC intends to partner with or how much money it will raise if it decides to opt for that.
“We have options on how we develop it. We can develop it at our own pace with our own revenues and money,” said Mr bin Sulayem. “We do also have a lot of interest from some big players...who are looking to do signature projects – not one tower but multiple complexes, high-rises and super tall towers. It [Uptown Dubai project] actually fits their bill – it’s worth their while and its worth their time.”
Uptown Dubai, which is estimated to create 10,000 jobs over the next decade, will include Grade-A commercial space, residential areas, more than 200 retail and food and beverage outlets and luxury hotels.
Two super-tall buildings will include a main podium 28 metres above ground featuring a two-level central plaza, larger than New York’s Times Square, that is connected to outlets and a retail mall. Off-plan sales for residential properties will kick off in the first quarter of 2018.
DMCC is open to a deal with any large multi-national company and there are several proposals being considered, the executive chairman said. It, however, is not under pressure to make a decision on how it will build the development.
DMCC has approached the debt capital market in the past. The free zone in 2005 issued a five-year US$200 million Islamic bond giving the option of redemption either in US dollars or gold bars. The fundraising exercise for Almas Towers Gold and Silver, and the subsequent development of the larger JLT area, gives DMCC confidence about the success of the Uptown Dubai project, Mr bin Sulayem said.
“I can only say that we have learned from how we financed and developed the bigger project – JLT. If you look at what has been delivered here, we have learned a lot,” he said.
What varies with the final choice of DMCC in terms of how it will proceed with the development is the delivery schedule. “If we are doing it on our own, it will take longer but surely it will be delivered. If we are doing it with a big strategic partner, you might see us doing it in one phase,” Mr bin Sulayem said.
The first tower in the free zone expansion will be delivered by the time Expo 2020 Dubai kicks off in the emirate, however, the two super tall towers, anchoring the development and designed by architects Adrian Smith & Gordon Gill from Chicago, are slotted for completion later, he said, adding that the timeline of construction and delivery of the project as a whole is still fluid.
By the time DMCC starts delivering the Uptown Dubai units, it will most likely run out of space to house new companies in the JLT free zone.
DMCC is now eyeing Latin American markets. It has registered new members at the same pace as it did in 2016 – a record year when 2,016 companies joined the trading hub.
More than 1,500 companies have already signed up to be part of DMCC in the first three quarters of this year, pushing the total number of firms operating out of the free zone to 14,178.
I can only say that we have learned from how we financed and developed JLT. We have learned a lot AHMED BIN SULAYEM Executive chairman, DMCC
Dubai’s DMCC, the biggest free zone in the world in terms of concentration of businesses, is running out of space to house companies.
It has added eight members each working day in the first nine months of this year to its list and, at this pace, the move to expand the commodities hub in the emirate shouldn’t come as a surprise.
DMCC – a centre for trading everything from tea and diamonds to derivatives – and the master developer of the Jumeirah Lakes Towers free zone (JLT), is pressing ahead with the development of Uptown Dubai, a 10 million square feet mixeduse project that will be anchored by two super tall towers.
Ahmed Bin Sulayem, the executive chairman of the free zone, declined to reveal the overall cost of the project, but a multi-billion US dollar ticket for the development of that size, scope and ambition will be a good guess.
As a master developer, Mr bin Sulayem, however, is not worried about either the cost of the development or the recent headwinds and oversupply that have hit the emirate’s property market in the past few quarters.
At least 4.4 million square feet of office stock is forecast to come up for lease in Dubai between now and the end of 2019, according toproperty consultancy Core Savills.
In addition, swaths of office space – at least a few hundred thousand square feet – are projected to become available because of corporate consolidation activity and company relocations, according to the consultancy.
The consultancy, in its third-quarter office market update for Dubai, estimates that 2.2 million square feet of office stock is projected to be completed in 2018 and 1.89 million sq ft in 2019, following a robust delivery pipeline this year.
“When we sold Almas Tower [in JLT] we were only 400 members. We are not worried because we are reaching 14,000 [members] and we are seeing there is momentum going forward,” said Mr bin Sulayem in an interview with The National.
“By the time we are delivering those buildings [in the extension], we would surely run out of offices spaces in JLT.”
In terms of finances, he has options to tap debt markets, take on strategic partners who are willing to invest and the build the project with DMCC, or finance the entire development from the free zone’s own balance sheet.