Dubai Builds a Whole New World -- With Islands

Associated Press Writer

From the air, it’s an astonishing sight: two gigantic palm trees fallen flat on the sea, which on closer inspection turn out to be an intricate network of manmade islands.

And beyond the palms there’s more -- 300 artificial islets laid out like a map of the world. There’s France, Florida, Ohio, even a mini-Antarctica baking in the 80-degree heat.

The $14-billion project that is reshaping this segment of the Persian Gulf coast is the world’s largest land reclamation effort and the focus of one of its most fanciful land rushes.

It’s also part of Dubai’s ambitions to rival Singapore and Hong Kong as a business hub, and Las Vegas as a leisure capital.


The wealthy are already snapping up the homes on offer, even though few have been built, none has been occupied, and some exist only on maps of what is still open sea.

Even so, nonexistent properties are being sold and resold at serious premiums.

“We have watched it from the beginning. It has just been extraordinary,” said Brian Scudder of Oryx Real Estate, a Dubai firm. Scudder said the properties, listed at $780,000 to $1.4 million, had doubled in price since hitting the market in May 2003.

Thirty-three islands in the archipelago called the World, 2 1/2 miles offshore, have already sold for $7 million to $35 million each.


When the entire project is complete, in five years, there will be three “palms” linked to the mainland by causeways, plus the 6-by-4-mile World, to multiply Dubai’s beachfront tenfold to more than 400 miles.

Land reclamation for the Palm Jumeirah, the first and smallest of the archipelagoes, is finished, and construction of 4,000 apartments and homes on its 12 square miles is scheduled for completion early next year.

The largest, 31-square-mile Palm Deira, has yet to rise above the sea and won’t be done until at least 2009, but 4,500 of its projected 7,000 homes have already sold, according to the developer, government-controlled Nakheel.

The manmade islands are not without their problems. Environmentalists say some of the millions of tons of sand and rock dropped on the seabed have buried coral reefs and oyster beds and contributed to the decline of fish stocks and turtles. The islands also are altering currents, exacerbating erosion on Dubai’s natural beaches.


And the hundreds of thousands of new islanders will be living just 10 feet above the waterline. In January, giant waves swept away five workers on the Palm Jebel Ali, one of whom drowned.

“If you build on a low coast like that, you’re exposing yourself to dramatic consequences, a high wave or high sea, or even if the sea rises,” said Frederic Launay, director of World Wide Fund for Nature in Abu Dhabi.

Dubai, one of the seven territories that make up the United Arab Emirates, is ruled by tribal sheiks -- not exactly President Bush’s idea of democracy -- and lies in a Middle East known mainly in the West for conflict.

Yet Dubai is among the world’s safest cities, an alternate reality to war-ravaged Iraq 600 miles to the north.


Lacking the oil that has enriched other Gulf states, this Rhode Island-sized emirate is determined to be a global business player without oil.

It has scotched almost all taxes, offers luxury resorts and shopping, and is open to foreign investors and residents. Its natural assets include pale sandy beaches and almost guaranteed sunshine.

“By the 1990s, all the beaches were developed. So we decided to build more,” said Hamza Mustafa, assistant sales manager for Nakheel, which is controlled by Dubai’s crown prince, Sheik Mohammed bin Rashid Al Maktoum.

Sheik Mohammed ordered Nakheel to build the beach islands and personally signed off on the palm design, which maximizes beach frontage, Mustafa said.


“Every grain of sand is utilized for beach,” Mustafa said.

For three years, the sea has bustled with barges dropping 6-ton boulders into water as deep as 70 feet, and dredgers blowing rainbows of sand sucked from the bottom.

As the land has piled up, with the sand held in place by plastic membrane, Palm Jumeirah has gradually taken shape. The island’s 17 fronds, some more than a mile long, are now crammed with half-built houses facing the beachfronts.

Home buyers include British soccer icons David Beckham and Michael Owen, and what Mustafa described as a list of “actors, singers and politicians” whose names he refused to disclose. Three-quarters of the buyers are foreigners, he said.


Funding comes from Sheik Mohammed and other local investors, as well as the future homeowners themselves, who, in great leaps of faith, have made down payments on houses that won’t exist, in some cases, for years.

Sheik Mohammed spurred the boom in 2002 by decreeing that foreigners could buy homes here, but the decree has not been enshrined in United Arab Emirates law.

The property boom depends on Sheik Mohammed staying in place, said Eamonn D’Arcy, a real estate economist at the University of Reading in England. “The people buying there tend to be those who don’t understand the type of risk involved.”

Still, foreign investment is moving ahead, according to Mustafa.


U.S. construction giants Parsons and Hill International are among those designing and managing projects on Palm Jumeirah, and hotel chains Hilton, Marriott, Sheraton and Fairmont have formed partnerships to open hotels there, he said.

Palm Jumeirah has an outer rim that is supposed to hold 23 hotels. South Africa’s Kerzner International is already building Atlantis, the Palm, a $1.1-billion, 2,000-room hotel complex it says will be similar to its Atlantis hotel in the Bahamas.

Together, the islands will house more than 20,000 apartments and homes -- some built on stilts above the water -- along with 100 hotels, and marinas, theme parks, restaurants and malls.

Island-building isn’t unusual by Dubai’s grandiose standards. It has plans for an underwater hotel, the world’s tallest skyscraper, an indoor ski slope and a gargantuan theme park that is supposed to be nearly as large as the city itself.


The cachet of Nakheel’s four manmade islands already has been eclipsed by plans for a far larger project, the Dubai Waterfront, which will reconfigure Dubai’s last stretch of undeveloped seashore with a city of 400,000 on manmade islands and canals.

The frenetic pace of development has utterly transformed Dubai from a sleepy trading and pearl-diving village of the 1960s to one of the world’s flashiest metropolises.

Wahid Attalla, Nakheel’s operations director, says there’s no reason to slow down.

“The world isn’t going to wait for you,” Attalla said. “There’s demand now. So why wait?”