These are Dubai's man-made islands, consisting of The Palm Jebel Ali, Palm Jumeirah, and
the world.
For the past 20 years, only 1 of these islands has been fully developed, with the two other
islands reported to be sinking back into the Persian gulf.
It had seemed that these projects were destined for failure, with no solid development plans
for over 10 years.
But all of this changed just recently, when the developer, Nakheel Properties outlined
a $5 Billion dollar plan to save these islands.
But why are they trying to redevelop this massive real estate project, and what's really
behind their ambitious new development plans.
Brief explanation of the current development
Dubai’s man made islands were first announced back in 2001, with Palm Jumeirah being the
first island to be fully completed.
The goal of these projects was simple: Expand the limited coastline of Dubai and meet the
rapidly growing demand for luxurious housing throughout the city.
The entire project included a series of artificial islands, all planned to be completed within
the decade.
But completing such massive projects proved to be a serious challenge, and with a financial
crisis looming, construction of both the Palm Jebel Ali and The World came to a halt.
More than 10 years later, these islands still sit completely abandoned, with very minimal
developments taking place throughout the past few years.
In the time following the financial crisis, the real estate market throughout Dubai drastically
slowed down, which hindered plans to finish these massive projects.
While the world has seen some smaller developments take shape throughout the past few years,
nearly all 300 of its islands still sit abandoned.
Additionally, reports have detailed that some of these islands have begun sinking back into
the Persian gulf, adding even more challenges to an already delayed project.
With all of these developments facing a number of different challenges, it seemed that they
were destined for failure.
With the slowing real estate market, it didn't seem that there would ever be enough demand
for these massive projects to ever be completed.
But close to 20 years after these projects were originally announced, the situation in
Dubai is very different.
Today, the real estate market is booming once again, and the developer of these islands,
Nakheel Properties has announced a $5 billion dollar plan to finish these projects.
To better understand this redevelopment plan, we need to take a look at each of the projects
individually.
Dubai’s original vision was to build a number of artificial islands besides the Palm Jumeriah.
The original concept featured a total of 5 different islands, with only 3 of them being
fully dredged.
This map from 2001 shows the original plan for Dubai's islands, and where all the projects
were intended to be built.
Today the scene is much different, and only 3 of these developments even appeared from
the ocean floor.
As part of the original development plan, this sinking land mass here was supposed to
be Palm Deira, which was planned to be the largest artificial island in the entire development.
In the wake of the 2008 financial crisis, development of this project was put on hold.
This has been the case for the past decade.
But Nakheel properties believes that this project still has potential, and announced
a new development plan to complete it.
The plan includes using the existing land mass to construct hotels and real estate properties
to meet the rising demand throughout the city.
Unlike the original development plan, no more land is planned to be dredged to complete
the islands, and instead the new developments will take place on the existing land mass.
This approach helps cut costs and gives the project a higher chance of being completed.
And while Palm Deira is a key part of this new development, The Palm Jebel Ali is by
far the largest initiative.
Construction of the Palm began in 2003, but was halted as a result of the financial crisis.
For the past decade, it's been sitting completely abandoned as there was no clear need for a
massive real estate project like this.
But Nakheel claims that they are revising this project and will invest more than $4.6
Billion dollars to relaunch the project.
The new development plan aims to build 1700 villas and 6,000 apartments on the palm.
This would drastically meet the rising demand for ocean properties throughout the city.
But many questions arise from these new development plans.
For one, The Palm Jebel Ali is in a district of Dubai that has not seen any significant
development throughout the past 20 years.
From satellite imagery, we can see how decelate this area actually is.
For this project to be successful, this area will have to be transformed to support an
influx of new residents.
The limited infrastructure at this end of this city may be the most complicated aspect
of relaunching this project.
For now, this all that has been revealed regarding future development plans of the Palm Jebel
Ali.
All of these plans and initiatives are part of a rebranding effort by the developer Nakheel
Properties, which believes that by reinvesting into these projects, they can meet the rising
demand for luxurious housing throughout the city.
The relaunch of these projects comes at a time where the emirates real estate sector
has seen a surge in sales and demand.
If this trend continues, these projects could have the potential to be very successful in
the future.
A report from last month found that Dubai’s real estate market is seeing its highest level
of growth in more than 12 years.
And according to Bloomberg, the real estate market in the city is up a staggering 89%
in just 1 year.
This is a sign that the demand for such massive projects could lead to future success.
With the strengthening market and higher demand, Nakheel believes that their investment will
pay off in the long term.
We also have to consider the current state of the global economy.
Nakheel properties is preparing to invest billions of dollars into these projects, at
a time where many large development projects have been put on hold.
Just as the 2008 financial crisis showed, all of these future plans and initiatives
could ultimately be canceled once again, depending on where the global economy heads.
Nakheel has not stated if the global economy will influence their plans to relaunch these
projects.
All of this raises many questions, regarding the future of these plans and initiatives.
Therefore, Will these projects ever become a reality, or will Dubai's sinking islands
continue to sit abandoned for the long term.
There are multiple factors that need to be considered to understand if this rebranding
effort will be successful.
For one, the current state of Dubai's real estate may not be considered to be stable/
While the real estate market is seeing rapid growth, many predictions have shown that this
intense growth is bound to slow down into next year.
With worsening conditions of the global economy, these projects may begin at the wrong time.
If the demand for this type of housing drops significantly, these projects may ultimately
be canceled once again.
The rebranding of Nakheel Properties is based on their efforts to relaunch these projects.
By creating new promotional advertisements and aligning themselves with Dubai's 2040
vision, the company believes that they can attract new investors to support their massive
projects.
With the current state of the global economy, is it possible for these projects to be successful?
Will the demand for luxurious housing throughout the city continue at its rapid pace throughout
the next few months and years.
And finally, Can Nakheel Properties actually complete such massive development projects.
Undertaking these large scale projects takes serious risk, and Nakheel Properties is putting
everything on the line to complete them.
With much uncertainty ahead, it's unclear if these new goals and initiatives will turn
out to be successful, and ultimately complete these massive development projects.
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