Investor spends $1.9bn on stalled Dubai Pearl
A major Hong Kong property group has acquired a $1.9bn (AED 6.8bn) slice of the Dubai Pearl project in what has been hailed as “a significant milestone” for the stalled development.
The acquisition of prime property assets within the 20 million square foot project by Chow Tai Fook Endowment Industry Investment Development includes high-end residences and serviced apartments and two five-star hotels, the companies said in a joint statement on Monday.
It is the largest bulk asset sale for the development, which is 100 percent owned by Pearl Dubai FZ LLC, a consortium of investors led by the UAE's Al Fahim Group.
The estimated $6bn project comprises a mixed-use scheme overlooking the Palm Jumeirah containing branded apartments, retail and leisure, commercial offices and hospitality units. It is set to contain four towers based around a large podium and contain 1,490 apartments, seven five-star hotels, including a Bellagio and an MGM, over 60 restaurants and a 1,800-seat theatre.
However, construction activity at the site has been limited, with the project's senior site engineer Shahid Quereshi admitting last year it was still a long way from completion.
In the joint statement, the companies said “the transaction represents a significant new milestone for Dubai Pearl, which will ultimately deliver a fully-integrated, world class, mixed-use development”.
“This is a landmark transaction which brings quality international funds on board as our partners in the delivery of the Dubai Pearl vision,” Santhosh Joseph, CEO of Pearl Dubai FZ LLC, said.
“Chow Tai Fook Endowment will bring complementary experience and expertise to the development. We are delighted with this opportunity to tap into the considerable potential of endowment funds from China.
“This transaction brings us closer to making Dubai Pearl a fully funded project. Once complete, Dubai Pearl will be one of the jewels in the crown of Dubai; a revolutionary project which sets new standards in world-class, sustainable development.”
CTFE is a diversified, Hong Kong-based company focusing on developing Chow Tai Fook districts in various cities of China, and is the exclusive development partner of China’s Ministry of Civil Affairs, the China Endowment Development Foundation. This transaction forms a part of the firm’s corporate strategy to deliver large multi-use development projects in China and other key strategic overseas markets.
The newly-acquired assets purchased within the Dubai Pearl project will be used in part for the company, and part will be resold to Chow Tai Fook Endowment high end clientele in the Far East seeking good rental returns as well as a property value appreciation.
Jason Chen, chairman of Chow Tai Fook Endowment, said: “We selected Dubai Pearl as our destination partner to develop Chow Tai Fook District internationally, starting with Dubai, because of the vision and quality of their project offering. We are proud to be part of the project and looking forward to a long and prosperous relationship.”
While the project was initially slated for completion in 2013, the latest project information said Dubai Pearl’s initial handover is scheduled to commence end of 2017.
When complete, it will ultimately provide a home for approximately 9,000 people, and a workplace for 12,000.