Canadian researchers help U.A.E. build 'The World'

source The Vancouver Sun

When Great Lakes Institute marine biologist Ken Drouillard considers the sheer magnitude of development plans for the Persian Gulf city state of Dubai, the words from W.P. Kinsella's novel Field of Dreams come to mind: "If you build it, they will come."

In the United Arab Emirates' most populous city, they like to build big.

The economic boom there might have been measured in megatons over the past two decades and the sheiks presiding over the growth seem intent on keeping the construction cranes sprouting, for the benefit of jet-setting tourists and billionaire investors, for decades to come.

The most ostentatious real estate development involves the construction of four man-made islands offshore at a cost of between $6 billion and $8 billion, which will see the coastline increase to 1,200 kilometres from 60 to accommodate 1.4 million more people, shopping malls, marinas, residential developments, hotels, resort areas and every recreational toy the rich and famous could dream up.

Seen from above, the artificial islands are shaped like gigantic palm trees, including dozens of land spit "fronds." One artificial archipelago called "The World" covers 54 square kilometres and includes 300 small private islands, grouped together to form an atlas-like image of the Earth.

And that's where the University of Windsor researcher makes his entrance. A project of that magnitude, he says, cannot help but have huge and unknown consequences for the marine environment. Drouillard and an international team of scientists have been hired to assess the possible threats and suggest solutions.

"The first time I went, in 2004, there were construction cranes everywhere you looked," he said. "Each year new skyscrapers go up. The pace of construction is so unprecedented it would give OnStar a nightmare. . . . Our team is part of an effort to mitigate the environmental effects."

Under the auspices of the United Nations University and the leadership of former University of Windsor professor Peter Sale, the team includes five full-time and four visiting members with a budget of $4 million. They work closely with local authorities to encourage best environmental practices as the project proceeds.

Drouillard has travelled to the area seven times since 2003.

"I think when we first came there was a need to educate them," said Drouillard, "to ensure engineering meets specifications and the environment is kept healthy.

"I was impressed they requested our help. It showed a willingness to do it right."

Drouillard said the islands were formed using sediment dredged offshore in the Arabian Gulf, hauled to the site and sculpted into the desired shapes.

One of the first problems was caused by sediment dumping, which caused such turbidity the cloudy water could barely allow sunlight to penetrate, threatening the area's natural coral in warm waters only 10 to 12 metres deep.

"The coral is compromised by the light limitation," he said. "The question, is how long will the turbidity last? We see evidence that it's settling out relatively quickly."

He said the islands, and their surrounding breakwalls, may dramatically alter flow patterns along the coast and cause erosion on the beaches and mainland waterfront. The water in the inlets between the palm fronds might become stagnant and high in salinity, leading to deteriorating water quality.

The carbon-rich and oxygen-depleted sediment could cause leaching of organic carbons resulting in bacterial growth and the production of toxic hydrogen sulphide harmful to humans. Landscaping byproducts and sewage escaping into the water would make matters worse.

"You absolutely don't want that to happen to the palms."

The researchers are looking to create an environmental management plan involving engineering solutions to ensure healthy water flow and minimize environmental impacts that could alter the habitat for natural sea life and fish stocks.

Drouillard said the team recommended cutting slits into the breakwalls to ensure more efficient flow to avoid those problems and continues to monitor the effects development may have on species in the natural habitat.

"At this point we're pleasantly surprised by the water quality," he said. "Salinity is good, dissolved oxygen, good. The nutrients are in the same concentration inside and outside the palms.

"The caveat is occupancy is not yet at 100 per cent. They expect 1.3 million people. . . . If the palms produce a toxic environment it could attract fish to their demise. However, if healthy, it could produce fish."

Al Mazaya marks $100m to buy Dubai properties

source Emirates Business 24/7

Kuwait-based Al Mazaya Holding has earmarked $100 million (Dh367 million) to buy properties on The Palm Jumeirah, Burj Dubai and Dubai International Financial Centre area, a top company executive has revealed to Emirates Business.

"We have put $50m aside and other investors from Kuwait have committed to invest the other $50m. We feel the market has hit the bottom. It is very attractive to buy now, as this opportunity will not last for a long time," Khalid S Esbaitah, Chief Executive Officer of Al Mazaya Holding said in an exclusive interview.

"It will be a structured portfolio and not a real estate fund," he said.

"It will be an income generating portfolio and we expect to start buying properties from September."

This investment will be different from the company's planned $100m distressed fund targeting Dubai

Esbaitah said the company is "very interested" in making a larger position for itself on The Palm.

"We are actually major owners of a series of shoreline apartments and marina apartments on The Palm. We have plans to make a larger model of furnished rent houses on The Palm in the next six months, and we aim to have a bigger position for us in the Burj Dubai district."

The developer expects the mid-size portfolio to generate a return of eight to nine per cent.

"The Dh367m investment is neither too little nor too much. It is mid-size portfolio, seeking to make eight to nine per cent return," he said.

Real estate companies in the region have seen declines in revenues as sales have virtually come to a halt. Most of the companies have created a leasing portfolio with an aim to have a recurring income-generating stream.

Esbaitah said Al Mazaya is looking to replicate the model with more investments planned in the future.

"This will be a model, which we are looking to replicate. We could do the next one with $200m. Although the first one is for Dubai, the next ones, probably next year, will include two other markets – Abu Dhabi and Qatar – where we are working now," he said.

The Al Mazaya CEO refuted reports about the company planning to exit any developments in Dubai, but said it was open to the idea of swapping of assets. "It isn't correct. We love the market in Dubai and believe very much in it. The market has stabilised now and is very attractive. But in some cases, we are swapping assets… may be we'll sell some property and buy anoother.

"We will be a little more aggressive on the residential sector," he added.

The developer, which is also listed on the Dubai Financial Market, said it has put on hold plans to build new projects this year.

"We will not be announcing any new project as we have a lot under construction. We have arranged all the needed funding for the projects under construction in Dubai. "We are not facing any problem. All the funding needed is already in our escrow accounts. We have debt, but we don't need more facilities."

Al Mazaya is also offering a helping hand to "overstretched" investors and expects to link all its payment to construction-linked milestones by end of September.

"We are looking at every case individually. We are consolidating and postponing payments in some of our projects," he said.

Earlier this month, the company said that work on all buildings at Queue Point in Liwan, Dubailand, had resumed with delivery set for 2010. The project is 40 to 60 per cent complete and 95 per cent of the units had already been sold. Buildings in Queue Point will be between five and 15 storeys in height, and will have gardens, green spaces and waterfalls.

"We had already stopped receiving payments for Queue Point for about eight months now. We have advised all the investors and the payment will start only once construction is back on. Even if the contracts were aggressive, we have changed our payments to construction-linked milestones."

Asked how the company expects to perform by year end, Esbaitah said: "It is a tough time now and we ask our shareholders to bear with us. I think we will be coming out positive this year and will generally have a better 2010. We will rely more on strengthening our balance sheet through a rental yield portfolio that we have in Dubai."

In July, Al Mazaya said net profit for the second quarter fell 62 per cent to $17.17m from $45.95m a year earlier, while earnings per share fell to 3.82 cents from 10.33 cents. First half profit declined 59 per cent to $35.06m against $86.68m.

Al Mazaya has no plans to delist from the Dubai Financial Market (DFM) and list on any other international stock exchange.

"We are happy and we will stay there [DFM] even if there is not a lot of volume being recorded. We are getting the exposure and we won't delist," he added.

In June, Al Mazaya Holding put plans on hold to acquire full stake in First Dubai Real Estate Development.

The developer, which currently owns 67 per cent of First Dubai, said the benefit of buying the remaining 33 per cent stake is "marginal and does not justify the costs of the acquisition".