Stalled Dubailand in talks for fresh investment

Dubailand, the stalled multibillion-dollar real estate project backed by Dubai Properties Group, is in talks to renegotiate four projects in the resort and plans to unveil details of a sustainable city by end-2012, its group CEO said.

The mega-project, which boasted tie-ups with Universal Studios and Legoland, will announce details of the projects by the second or third quarter of 2012, said Khalid Al Malik.

“We are also in discussions with the others that have struggled during the crisis and that struggle was mostly related to the financial problems,” he said. “Now we are actually in serious negotiations to bring them back and assist… these projects to come back.”

Alongside details of a planned sustainable city within the resort, three further projects funded by Middle East investors will be confirmed in 2012.

“We are currently in talks with three other investors,” he said. “They [include] a couple of investors from the region who would like to start projects in Dubailand.

“We are in serious negotiations with them, hopefully next year [we can expect announcements], in the first and second quarter.”

Dubai had the world’s fastest- growing property market from 2006 to mid-2008 because of rising demand from a growing expatriate workforce and speculation fuelled by borrowing. Prices quadrupled in the six years following the 2002 decision to allow foreign ownership of property in designated areas.

Dubailand was one of the Gulf emirate’s most ambitious developments, announced at the height of the real estate bubble. The resort was originally slated to be twice the size of Walt Disney World, and was reportedly worth AED335bn at its peak.

The project involved dozens of developers and sub-developers and was to feature seven themed areas, residential developments and what was planned to be the world’s largest shopping centre in Mall of Arabia.

The development was placed on hold after the financial crisis triggered the collapse of Dubai’s real estate market in late-2008.

Al Malik said in May that DPG was in talks to restructure and scale back the resort, in a bid to get the project back on track by the year-end.

Business Monitor International in May warned that Dubailand should be scaled down significantly in order to fit in with the “harsh realities” of the emirate’s beleaguered real estate market.

“With….demand for new projects still weak, we believe a significant scaling down of Dubailand's ambitions is needed if it is to fit the economic realities facing Dubai in 2011,” the research consultancy said in a report.