Construction activity in Dubai has plateaued out at a high level, according to industry sources. Key players in the sector are looking at new opportunities, the focus being industrial, property development and leisure projects.

Three mega projects which have created history of sorts are complete. The feverish pace of building activity over the past few years has resulted in a glut in the commercial and residential segments of Dubai's construction market. What next?

For some, there is a downturn, for others it is levelling out of growth. Most accept that it is part of a cycle and the sector will bounce back sooner rather than later.

During the last three years, the Big Three projects - the Burj Al Arab, Emirates Towers and the Dubai Airport new terminal - had created an unprecedented boom in the construction scene. There is a feeling of lull with the completion of these projects while actually the activity has plateaued at a high level, reason out some industry sources.

Key players in the market are hoping for new projects to come up, both in the government and private sectors, to give the industry the required momentum and the high oil prices give them the hope.

With the Dubai construction market becoming very sophisticated and most projects coming up being fast track, contractors have had to invest a lot on new and costly equipment. This is also putting some pressure on them.

While big players are reporting a sufficient number of jobs, the small contractors complain that the big ones are now grabbing their share of the market, crushing them.

Already there is a severe problem with margins with everyone complaining that margins are so low that they are causing all sorts of problems within the industry including compromising of quality and payment delays and other related problems.

In every segment, there is too much competition and people in the industry feel that there is an urgent need to introduce some sort of quality standards that will keep the cowboys at bay.

The downturn, if any, has been felt by the people in the initial stage of the construction chain such as consultants, contractors and concrete producers. Sub-contractors are still saying they are doing good business.

Most see a turnaround in the last quarter of the year or early next year. They are hopeful that some of the mega projects announced by leading private property developers such as Emaar Properties and Al Ghurair will come to fruition soon.

"These are big projects and it has to be seen how they will impact on the market," said one contractor.

The market will also look into expansions, refurbishments and repair in the short-term, they feel.

Major projects that will keep the sector busy include the numerous shopping malls that are being built or expanded as well as the hotel projects, which are designed to cash in on Dubai's booming tourism sector. The industry is also anxiously waiting for the release of tenders on the proposed $4.35 billion Westside Marina residential and business complex and the $700 million Dubai Internet City.

Commercial/residential projects

Emaar Properties is developing a number of projects in Dubai, the latest to be launched being the Emirates Lakes project (See separate report). Other major developments underway include the Westside Marina, the Gold and Diamond Park and Emirates Hills.

The multistage Westside Marina, being promoted by Emaar, is currently in the design phase with Canada's HOK as the consultant. The first phase will involve six residential and commercial towers. Carillion of the UK, With its local partner Al Futtaim, is working on $22.72 million contract to build the quay wall at the complex.

When completed, Westside Marina will be a city covering 53 million sq ft, housing a community of more than 100,000 residents. It will have a commercial district, parks, cafes and restaurants, hotels and shops and a range of recreational facilities.

Work under way on Phase One of the Dh100 million ($27.23 million) Gold and Diamond Park on Shaikh Zayed Road is due for completion in June. The 63,000 sq m site will house regional and international gold and jewellery craftsmen, manufacturers and retailers and themed tourist attractions. It will have 750 workshops and offices.

The company's Millennium Tower, expected to be a purpose-built 'smart' building, is be launched shortly at a cost of Dh400 million, following a remodelling of the project plan in accordance with a comprehensive layout of the area.

The second round of tenders for the $700 million Dubai Internet City (DIC) has been floated. Bids were to be submitted by the end of last month. WS Atkins is the project consultant for the second package, which will involve the construction of four buildings. The first package was recently awarded to Emaar Properties and involves development of two buildings. The first phase, which has the Norr Group as the consultant, will be completed by October (See pg 79).

The site for the DIC will span an area between Dubai Police College and Dubai Aluminium Company (Dubal) on the Dubai-Abu Dhabi Highway. The first phase of the project will be completed by October.

Final touches are being put to the prestigious Emirates Towers project on Shaikh Zayed Road, near the Dubai World Trade Centre (DWTC). The project includes a five-star hotel block and an office block which soars 350 m, making it the tallest building in the Middle East. Work on the office block, which offers a total leasable space of 68,500 sq m, was completed in November and tenants have begun to move in.

Work on the Dh1.4 billion ($381.26 million) Al Ghurair Retail City project is progressing on schedule, about half of the redeveloped existing Al Ghurair Centre now ready. This area has a food-court and top-of-the-line international and regional retail outlets. The transformation of the existing mall into a modern-day shopping complex is expected to be completed by September 2000, and the entire multi-use Retail City project - refurbished and reconfigured with plazas, office and residential complexes, cinemas and parking areas - will be ready by November 2001. Work on the project is to be implemented in 25 packages.

The project, which aims to be 'a city within a city', will spread over an overall retail area of 800,000 sq ft and will have more than 500 long-term and 200 short-term serviced apartments, 300,000 sq ft of office space, parking lots for 3,500 cars in underground and multistorey parking areas, a food-court for 600 diners and a nine-screen cinema complex.

The MKM Group, owners of Wafi Complex, has unveiled a Dh735 million ($200 million) multi-phase development plan to transform the shopping, leisure and business centre into a total destination location, known as Wafi City. Development plans are well under way, with construction scheduled to begin this year.

The first phase will include the construction of Wafi Suites, a luxury apartment block with some 200 fully-serviced apartments. It will also include Wafi Residence II, a complex of two, three and four-bedroom apartments with office space on the ground floor. Also planned are a five-star hotel, a cinema complex, more restaurants and a technologically-advanced sports complex including a stadium.

Plans are under way to expand the Bur Juman Centre at a cost of around Dh1 billion ($272 million). The blueprints for the expansion of the shopping complex have been completed and bids for the project will be invited soon. The expansion is expected to double the shopping area at the three-storey shopping centre.

Construction work on Town Centre 2, adjacent to Town Centre on Jumeirah Beach Road, is expected to start within two months. The Dh400 million ($109 million) complex, which will be built on a 85,000 sq m area, will comprise two floors plus basement parking. Work on the project is due for completion by February 2001.

Al Ahli Club and the Emke Group are jointly developing one of the largest shopping malls in Dubai. The project, will cover an area of 350,000 sq ft, next to the club's premises. To be known as the Lulu Hypermarket, the centre will have a built-up area of 220,000 sq ft with provision for parking more than 1,000 cars. When completed this year, it is expected to accommodate a spacious supermarket-cum-department store, exclusive showrooms, a food-court and an amusement centre.

The nine-storey Lexus Tower at the Deira City Centre is expected to be completed by June. The building will contain the 100,000 sq ft Toyota and Lexus showrooms and will house the corporate headquarters of the Majid Al Futtaim Group (MAF). Work is also in progress on the centre's 11-screen 3,000-seater multiplex, which is to open by July. The current expansion of the City Centre will add around 300,000 sq ft of retail space to the project at an estimated cost of Dh300 million ($81.74 million).

The Dubai World Trade Centre (DWTC) is to implement another major expansion, the blueprint for which is currently being drawn up, said Mohammed Alabbar, vice-chairman.

Work is in progress on a new 20-storey tower block and shopping mall on Al Maktoum Street. Being built at a cost of Dh51 million ($13.88 million), the project will occupy a 15,000 sq ft site and will incorporate 115 parking spaces in three underground parking levels.

The Commercial Bank of Dubai (CBD) plans to build a new headquarters at an estimated cost of Dh200 million ($54.46 million). The project is scheduled for completion in December 2001. The new building will occupy a prime site on Al Ittihad Road near Deira City Centre. The building will offer 216,000 sq ft of office space on 10 floors and have three levels of underground car-parking. Norr Group Consultants Dubai is the consultant on the project.

Emirates National Oil Company (Enoc) has launched work on its new Enoc House II office complex in Bur Dubai, next to the existing Enoc House and Eppco House, under a construction contract worth around Dh50 million ($13.61 million). The building is due to open in January 2001.

Hotels

Dubai is now home to what is considered to be the tallest hotel in the world - the magnificent 321-m Arabian Tower (Burj Al Arab). Rising from off Jumeirah Beach, the 52-storey building which is rated at seven stars and has 202 duplex suites, was completed at the end of last year.

Another highly prestigious project, the Emirates Towers which boasts the tallest office building in the Middle East and Europe, includes a five-star hotel block which is expected to open this month. The 400-room property including 40 luxury suites, will have three main themed restaurants out of a total of 10 such outlets. Stretching 305-m high, it will have 51 storeys.

Meanwhile, construction work is under way on another mega hotel project, the Grand Hyatt hotel and apartments, near the Garhoud Bridge on the Qatayet Highway.

South Korea's Ssangyong Engineering and Construction Company is working on a Dh600 million ($163.5 million) contract which is expected to be completed by end-2001. The contract includes building three hotel towers and two furnished apartment blocks, with the overall cost of the project being Dh1.6 billion. The project has been designed by Arkiteknik International. The six-star hotel will have 432 rooms and include 49 studio and junior suites, six Executive suites, three Prince suites and one Royal suite. The hotel is expected to be a major conference and event centre featuring a 1,500-seater Grand ballroom and a 600-seater Junior ballroom.

While the total area reserved for the project is 1.4 million sq ft, the footprint for the hotel and residences will cover 30,000 sq m. About 50 per cent of the area will be landscaped and will have an extensive network of artificial lagoons.

Belhasa Construction is working on a Dh120 million ($32.7 million) contract to build Dubai's second Holiday Inn Hotel - the 240-room Holiday Inn Bur Dubai - which will be opened in the third quarter of 2000.

To be located adjacent to the American Hospital, the Holiday Inn Bur Dubai will include 45 executive suites, four royal suites, and two presidential suites. The hotel will have a business centre, four meeting rooms, a 500 sq m ballroom with banquet facilities, and a rooftop swimming pool and fitness centre. The architect for the project is Design Architectural Bureau.

Emirates' Al Maha Desert Resort is completing an extensive restoration programme to green the desert and return it to its natural glory. The restoration programme has seen the planting of 6,000 indigenous grasses, shrubs and trees over approximately 20 per cent of the nature reserve land area.

Airport/Air Show Site

Dubai's Department of Civil Aviation is moving ahead with plans for the further expansion of Dubai International Airport project. The DCA is currently studying two designs for a second concourse, which will be implemented as the second phase of expansion which is slated to commence in 2003-2004. It is expected to include a dedicated terminal for Emirates operations, to be called Terminal 3.

A new five-level concourse, which was built as part of the expansion of the airport, is due to be handed over this month. With 27 boarding gates, the futuristic concourse has been designed to handle 20 million passengers a year.

The emirate has spent some $540 million on expanding the airport under the first phase and plans to spend another $600 million on the second phase of the development.

The Dh300 million ($81.74 million) permanent site project for the Dubai Air Show was completed last October.

Dubai Investments Park

Over 95 per cent of Phase I of the 3,200-hectare Dubai Investments Park has been occupied by industrial tenants, involving an investment of Dh1.8 billion. The development of Phase II, covering 400 hectares, will begin in a few month. It is expected to require an investment of Dh60-70 million.

Dubai Investments Park Development Company (Dipd), a subsidiary of Dubai Investment (DI), plans to build Dubai's first $100 million private power plant in collaboration with a foreign firm to supply power to all industrial and residential units within its business park. Three independent power producers (IPPs) from the US, Belgium and Ireland have been shortlisted for the build-operate-transfer (BOT) contract. The plant is expected to have an initial capacity of 120-150 MW. By May-end, a contract is expected to be signed for the construction of the project.

Power &Water

Dubai Electricity and Water Authority (Dewa) signed a Dh930 million ($253.4 million) contract with Korea's Hyundai Engineering and Construction Company for repowering of Jebel Ali Power and Desalination steam station D Phase II.

The project, which will be completed in seven tranches between 2001 and 2002, entails construction of gas turbines with a total output capacity of 360 MW of electricity, three waste heat recovery boilers, 400 kV substation and other related works. The project will raise the 'D' Station Phase II Plant's capacity to 585 MW from the existing output of 225 MW.

Work is also due to start on the second phase of Jebel Ali's K power and desalination station which is slated to become operational in 2002. The estimated Dh829.42 million ($226 million) project aims at producing 500 MW of electricity and 20 million gallons per day of water. The consultant is Fichtner of Germany.

Italy's Fisia Italimpianti and Impregilo are working on a Dh526 million ($143 million) contract for the construction and commissioning of three desalination units at Jebel Ali. The project will have a combined capacity of 27.5 million gallons of water per day. The first unit, with a capacity of 7.5 million gallons per day, will be part of the existing G station at the Jebel Ali plant and is scheduled to come on stream this summer. The second and third units, to be part of the new K station being built at Jebel Ali, will each have a capacity of 10 million gallons per day. They are scheduled to come into operation by January 2001. The project is expected to raise Dewa's total production capacity of desalinated water to 143 million gallons per day.

Dewa is also investing Dh369 million ($100.5 million) on three projects for installation and commissioning of three main transformers at Merkadh (Bur Dubai), Jebel Ali Free Zone and Mushrif.

Japan's Mitsubishi Electric Company is working on a contract to build a substation near the camel racetrack. The Dh294 million ($80.06 million) substation is scheduled to be completed next year.

Roads, Drainage & Sewage

Dubai Municipality is implementing a Dh140 million ($38.12 million) road construction project in and around Dubai International Airport to support the airport expansion. A new car-park was completed in October. It has a capacity to accommodate 1,000 cars and is linked to the main terminal building by two covered air-conditioned pedestrian bridges.

Construction is under way on the next phase which involves a new three-level intersection opposite the entrance to Dubai Cargo Village. When completed by the end of July, the junction will consist of an east-west underpass, a regular intersection above it and a flyover from Dubai International Airport to Al Garhoud Bridge.

The 50-km-long Dubai Ring Road project will be completed by January 2001. The project, which was launched in 1998, will be completed in two phases. The first phase, carried out by three contractors, has an estimated cost of Dh510 million ($138.96 million).

The second phase has an estimated budget of Dh213.63 million and will be completed in June. It comprises 28-km of three-lane dual carriage way linking Jebel Ali-Hibab Road with Al Ain Road where it joins phase 1 of the project.

Dubai Municipality has completed about 50 per cent of the work on the Dh295 million ($80.33 million) expansion of Al Awir sewage treatment plant which will double the current capacity by March 2001. When completed, the plant's capacity will be 260,000 cu m.

Other Projects