Dubailand, the multibillion-dollar real estate project backed by Dubai Properties Group, is in talks with developers to review their contracts under a wider restructuring plan that aims to get the project back on track by the year-end.
The mega-project was one of the most ambitious entertainment resorts planned for Dubai but was placed on hold in 2008 after the credit crunch saw the emirate’s real estate market collapse.
The development, which was originally slated to be twice the size of Walt Disney World Resort and boasted tie-ups with Universal Studios and Legoland, may be scaled back to bring the project in line with new economic realities.
“Dubailand is currently in the process of evaluating new projects,” said Khalid Al Malik, CEO of Dubai Properties Group, at the 4th Arabian Business Forum on Monday.
“We are renegotiating the terms of the contracts and the other issue is the size of these projects – so we’re reviewing the contracts to make it easier for investors.”
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.
The global financial crisis sparked the collapse of the emirate’s property sector, wiping more than 60 percent off house prices and sending speculators fleeing from the market.
About 50 percent of Dubai real-estate projects were cancelled or suspended after the collapse.
Launched at the height of Dubai’s real estate bubble, Dubailand was reported to be 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.
Al Malik said DPG planned to unveil a revised masterplan for the mega-project later this year.
“You will hear good news [soon],” he said. “We will have something to announce [in terms of the revised masterplan] this year.”
Dubai developer Diamond said in April it planned to build 2,500 townhouses in the entertainment complex by 2016.