Dubai Pearl Reimagined 20 Years Later

by Editor

Near Dubai’s Palm Jumeirah, a futuristic building is being built. It will have a 90-meter-high infinity pool and a big jellyfish tank.

However, four unfinished buildings from the 20-year-old Dubai Pearl project lie opposite.

Dubai’s swift response to the coronavirus drew money from around the world, driving up high-end housing prices. According to Knight Frank, prime property values increased by 56% in 2021. That beat London’s 1.3%, New York’s 3.6%, and San Francisco’s 19%.

Relics from Dubai’s 2009 property crisis still dot its dazzling cityscape. The real-estate craze in this metropolis has been so strong that unfinished megaprojects like the Pearl are back in the spotlight.

The Pearl is located in a Tecom Group freezone, which is about to go public. Tecom is owed money from a land sale years ago, according to records and sources. Bloomberg News could not independently verify who owns the project or the site it was supposed to be built on.

The Tecom IPO will be a significant test of Dubai’s revival since the 2009 crisis, when an era of outrageous development and soaring prices ended and many individuals and money managers lost money.

The Dubai Real Estate Regulatory Agency, an arm of the Dubai Land Department, said it is in talks with the Dubai Pearl master developer to finalize everything and restart the project. A government agency spokeswoman said it was in talks with Tecom’s parent, Dubai Holding, but declined to disclose information. 

The city’s resurgence has more individuals eyeing unfinished properties. One Toronto-based entrepreneur says the Pearl site could be great for a moon-themed resort, complete with craters. According to Dubai Pearl investors and records, a foreign fund has made at least one bid in recent years, albeit its status is unknown. A local developer, Damac Properties, looked at the land but balked at the legacy difficulties.

Unbuilt sites in Dubai are a reminder of 2007 and 2008, as they are in other cities worldwide. In Dubai, however, some of these abandoned plots are now in the core of completed and highly sought-after neighborhoods, said Knight Frank’s Faisal Durrani. In the last decade, the value of such properties has risen, highlighting the possibilities in a city running out of prime plots.

Omnix Group began the $820 million Pearl project in 2002. After a shaky start, an Abu Dhabi family group reintroduced a more ambitious version in 2007. The location was supposed to have luxury apartments, an opera, and MGM-branded hotels.

The Abu Dhabi developer wasted a huge amount of investors’ money on marketing, so when global credit dried up during the financial crisis, he couldn’t finish the project.

86 early investors in Dubai Pearl are still pursuing legal battles nearly 20 years later. They’ve petitioned to reclaim their money through a new developer.

Dubai’s economy is improving due to a surge of new labor and policies to keep expats in this historically transient city. The government announced Tecom’s IPO in December as part of an aim to grow the local stock market to AED 3 trillion ($817 billion).

Last month was Dubai’s busiest April for real-estate sales since 2009, according to Property Finder.

Real-estate analysts say Dubai is cheaper than New York and London. Dubai established stricter borrowing limitations for purchasers after the 2009 property collapse. Analysts saw the measures as a way to enhance regulation, avert future bubbles, and rehabilitate Dubai’s worldwide standing after investors lost money.

Ludmila Yamalova, managing partner and attorney at Yamalova & Plewka, who has represented Dubai Pearl investors, noted that over the last 13 years, Dubai’s real-estate market has been radically reformed—for the better—in preserving investors’ interests. She added that new laws will help prevent wild speculation or a bubble.

Canadian entrepreneur MOON World Resorts Inc. claims the Pearl site could be a great place for a futuristic, moon-shaped resort, and has prepared a rendering. No regional license has been signed, and licensees must gather funds for the project, so it’s questionable if the proposal will ever be realized.

Michael Henderson, co-founder of MOON World Resorts Inc., believes that MOON Dubai, which will be built on the Pearl site, will be stunning and will provide a magnificent, unique destination close to the Palm Jumeirah.

Yamalova says the Dubai Pearl site may be used for a less glamorous project. She said that ideally, this land would be repurposed into some sort of community space.

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