Village Solutions

A CASE STUDY OF DUBAI’S WONDERLAND

In 2008 I made 10 trips to Dubai and worked on two projects. In doing so, I met many wonderful people and saw a good deal of projects that were beyond belief. A good deal of these projects were completed and many more will never be built. In general, I found the Emiratis to be gracious host and the hired help to be less than forth coming. Outlined below are my observations.10 Problems with Dubai

1. Birds of a Feather. Many of the development companies in Dubai were managed by self-serving groups who were good at covering everyone’s back. As an example, some firms consisted primarily of Australians, and another all British. Their reaction to outside of the family managers was “it’s our tea party and you are not going to crash it.” In this regard, one would get a sense that the players knew they were building a house of cards and wanted to get as much as they could until the party was over.

2. How many times could you slice the same pie? Too many related development companies chased the same market with the same product.

3. Lack of Experience. There were not enough managers on the ground that had significant experience with multi-tenant retail development and even fewer with mixed-use property management experience. In their place were former academics, PHDs, engineers, graduates of the London School of Economics and more. But what was missing was conviction in knowing how to get things done.

4. Flawed Research. Market research was viewed as icing on the cake and not a reality check. People who did the research were well educated but had spent little time in doing real research on the performance of actual operating properties.

5. Wrong starting point. Market researchers bought the notion of 35,000,000 annual visitors to Dubai by 2012 and most projections flowed from that initial flawed estimation.

6. Lack of real people. Many new developments failed because the required density of buyers, tenants, shoppers and guest could not be generated fast enough to support the enormous infrastructure costs of highways, bridges, monorail system, airports, water and sewer and more.

7. Alice sighed wearily. `I think you might do something better with the time,’ she said, `than waste it in asking riddles that have no answers.’ Timetables for new developments and justification for projects were unrealistic and when questioned about the underlying reasoning I would often be told, “Everything is possible in Dubai”.

8. Lack of Transparency. Information and communication regarding all aspects of a project were often hidden within their own development teams. There was little transparency in top to bottom directives. In brief, there were too many levels of management and when asked the hard questions one would often be told a lie and the other would swear to it. In this example, almost every project in Dubai was going to be bigger, grander, and more creative than the next. A decision maker would communicate a vision of the world’s tallest building, the world’s largest mall, and so on. An architect would then translate the vision into wonderful computer generated images of the vision which would become the plan. Yet, there was limited central planning that was charged to connect all of the individual projects. As a result simple issues of capacity, parking, sidewalks, crosswalks, and more were thrown to the side.

9. Multi-brand tenants. Through licensing agreements, joint ventures, partnerships and franchises, single entities operated numerous storefronts with different brands. In some cases the full product line and the brand experience was appropriately transferred to a Dubai mall, but more often than not, one could see significant differences between company owned and operated shops as opposed to the Dubai presentations. As an example, Kitson in Wafi Mall just does not compare to the full experience on Robertson Street in LA.

10. Master Plans. Most projects in Dubai were driven with a vision communicated by excellent illustrations, models, and elaborate brochures but there was limited master planning of the entire city/state. As a result, the edges of projects, the zones between projects, and connection with adjacent properties were just short of horrible.

Now that I have vented, there is a lot of hope for Dubai. Hope that the vision is filtered and modified to allow it to grow at a sustainable rate. There is a hope that thecity/state regains its momentum and that new leadership finds its way to the top of the best development firms.

Tags: development, Dubai, Dubailand, UAE, Wafi

This entry was posted on Monday, December 28th, 2009 at 4:23 pm and is filed under Culture, Real Estate, Real Estate Development, Retail, Shopping Centers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.