Sunday, July 30, 2006

the Palm

Eighth wonder of the world...

The Palm Jumeirah is the first of 3 planned, palm-shaped islands being built off the coast of Dubai. The island is being readied for the handover of its first 4000 properties by the end of 2006. It is property pioneer Nakheel's showpiece development and will be their first major project completed (partially completed, that is, with sections due to be rolled out in phases over the next two years).

Question: Where are the palms--as in trees?

Ok, the question is a bit facetious. Of course, thousands of palms and other forms of vegetation can be planted or transplanted onto the island once it gets closer to completion. But photos of the Jumeirah Palm, with nearly complete or partially built-up plots, reveal that there really won't be much space for trees or greenery, of any kind.

The island is supposed to be the crème de la crème of residential properties, with a much touted resort ambience. On the face of it, however, it appears little different from existing inland developments which feature rows of tightly packed villas interspersed or separated from one-another by artificial ponds, lakes and other waterways. Surely the Palm is supposed to be much more than that.

On a less critical note, the island is certainly a masterpiece of engineering. Aerial views reveal a perfect palm-shaped formation with the green waters of the Gulf surrounding its many fronds. It will certainly be beautiful, with attractive landscaping and impressive properties to match, once construction of its thousands of properties is complete. It will feature a 10-lane highway as its main thoroughfare, several bridges, a tunnel and a monorail. Despite, its shortcomings, just the fact that it is soon to become reality is something to laud.

Daring to Dream

I have heard the words of critics, both the ringside spectator type and the informed insider. "Nakheel has grand ideas but knows very little about detail...," they suggest--wherein, famously, lies the devil. But grand visions are what dreams are made of, and "...it is from he that dreams, that great things spill forth." That is the thought I would rather convey to the naysayer.

To Nakheel's credit they have dared and continue to dare to dream. What they lack in expertise, they seem to make up for in resolve. That, I say, is the key to success, even more so than having technical expertise or other prowess.

As an illustration, take the US space program. In its early days the dreams were grand, but the experience little and so too the expertise. Yet, when the country's leadership resolved to land a man on the moon in as little as 10 years, all obstacles were eventually overcome. From the 1970's onward, however, that resolve disintegrated. Though the experience and the expertise remained, and even grew, the ability to excel seemed to have faded with the dream.

How Good is Big?

Nakheel fares well in other comparisons as well. I would argue, for example, that one may take heart that Nakheel is not Damac*. Nakheel is sometimes regarded as the UAE's largest property developer (it is a semi-governmental entity). In compasion, Damac is the self-acclaimed largest private property developer. While Nakheel has a dozen or so spectacular developments in progress or in the planning stages, all within the UAE, Damac has some four dozen or so projects, largely in the UAE but also spread out across the Middle East and as far a field as China.

Damac's fortunes, however, appear to rest on a house of cards. With over 50 projects proposed, less than a handful are underway, and only one, thusfar, completed (to disappointing results). There is no warranted claim to greatness in this. Nakheel, on the other hand, despite a spectacular stumble or two has the bird in hand with its first Palm project--even if yet to be completed. Such is the grandeur of the Jumeirah Palm Island. It is not only a wonder for Dubai, but also an ace in the hole for its builder.

*As an aside, I refer to Damac. Who am I, I will admit, to predict where their fortunes lie? But every indication is that there are disgruntled customers and a genuine skepticism as to their ability to deliver on such a multitude of projects without any established record.

722 words
Open a printable copy, in a new window.

Links:

What’s Wrong With These Beautiful Pictures?—a word on failed ambitions, ala Nakheel.
Palm Jumeirah Ready by Year End, Gulf News update on Palm progress.

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3 comments:

Fibber said...

Hi BD:

We too have been keeping a close eye on the photo sites showing the villas going up on The Palm, Jumeirah and have become increasingly amazed at the density of the development.

Then lo and behold, we're sitting in front of the TV in Australia last week - where we happen to be at the moment - and it's showing some Discovery program or similar about Dubai that happens to be a few years old.

The interesting things is that it features the property roadshow that was held in London and the sales pitch that was being made to potential purchasers for The Palm.

Honestly, you'd think from the amount of greenery and spacious grounds surrounding the artist's renderings of the villas that you were buying a gated estate in Bel Air! You would have needed a bull-horn to speak to your neighbor.

And this is, I think, where Nakheel's problems may arise. If there is a huge disconnect between what people's expectations were and the reality then no amount of triumphant engineering in building the island in the first place will compensate for being able to lie in bed and hear every word your neighbors are saying!

To use your analogy - if you've promised people the dream of going to the moon and only end up sending a rocket to Bakersfield - it's still Bakersfield, no matter how impressive the rocket science itself may be.

To be honest, you look at these photos - especially the one in Gulf News - and your heart sinks.

And this is coming from someone who, I guess, would be a prime candidate for the purchase of a villa on The Palm -

We love Dubai, given my business we have the opportunity to live there and we've watched the progress on The Palm construction over a number of years while staying at the Burj al-Arab.

Very exciting, we thought, and we started to think that we would try and buy a villa on the secondary market as the initial offering was totally sold out. Having seen the roadshow renderings on TV, I'm not surprised the offering was over-subscribed!

In all honesty - given what we've seen of the reality - we'll be reconsidering the secondary market idea.

The reality, as opposed to the hype, just fails to deliver on the idea of luxury and exclusivity that I think people expected.

As you rightly say, "it appears little different from many of the inland developments". This was certainly the case when we went to look at villas at Emirate Hills.

They were big houses we looked at -close to 10,000 sq feet - but the lots were so small and the grounds so limited that we dismissed the idea.

This has led me to wonder if Nakheel has failed to understand what, at least, the Western idea of a high end development is. It's not just about a big house with lots of bathrooms and a ball-room size kitchen.

It's about privacy, grounds and gardens. That's the true measure of the top end. I've lived in Beverly Hills, Bel Air, Palm Beach Florida and Gstaad and it's always been the same - people want some land and they want to feel they are in their own secure world.

Perhaps this is a cultural thing as much as anything - maybe in the Gulf these things aren't held at a premium and what point are large gardens if you can't water them?

Or perhaps Nakheel spent so much on the engineering and infrastructure side of things by building The Palm itself that the only way the financials would work was to maximize the number of villas.

Either way it's a pity.

My fearless prediction is - there's going to be a lot of people who thought they were getting a house in Bel-Air-by-the-water and have found out they bought a McMansion similar to those tract housing developments that stretch all the way from LA to San Diego.
Or Boca Raton too. Although in Boca, there's generally a golf course. I'm with you - where did the resort ambience go?

For that reason, I believe, the secondary market may be a lot busier than people think - and the sales a lot harder than they anticipate.

As for us? Well, we figure you probably get a lot more privacy in an apartment and that's where we're looking at the moment. Not one by Damac - thank you very much for the heads up on that! - although the idea of a free regular wash-down might have its attractions I suppose.

I just have a feeling if that's our impression of The Palm it may be a lot of other people's too. Time will tell, I guess

Take care,
Fibber

BD said...

Hi Fibber,

Quite interesting to hear that an old documentary is in circulation, documenting the actual sales pitches of the early days. I don't think anyone could just give Nakheel the benefit of the doubt and say they don't appreciate the value of a nice lawn--otherwise they wouldn't always depict them in the advertisments.

I suppose it is partly economics, as you suggested:

...perhaps Nakheel spent so much on the engineering and infrastructure side of things by building The Palm itself that the only way the financials would work was to maximize the number of villas.

It is also partly the lack of government regulation which would require truth in advertising.

For those who actually live here (in the UAE), the renderings, full of greenery, are taken with a grain (or chunk) of salt, as we know that there's nothing all around but desert--and other buildings. But others can be easily mislead.

Still, no matter how one might try to dress things up, it appears that these are quite deliberate attempts to suggest one thing, knowing in reality that it will never be that way. In Dubai, however, without any laws against it, it is practiced as a kind of poetic license.It is the same story with towers and views. Every tower is depicted as alone with stunning views all around.

Another thing that bothers me--the teacher in me coming out--is the constant use of the present tense to refer to thngs that don't yet exist. "Our property has this... or that..." when in reality it does not even exist yet.

So, that is part of the downside of the industry here.

The photos in the link I posted and the Gulf News story are really telling. When I first began seeing actual images from the Palm--perhaps a year or so ago--I was really taken aback. But over time, it just started to seem normal, as that is how most things are built here. I would find myself thinking that the houses must really be nice, to be able to compensate for the absence of grounds.

It all, in fact, wouldn't be so bad if at least these properties were honestly depicted that way.

I am a buyer--of apartments myself--but I know for the most part what I am getting--at least I presume that I do. One feels a need, however, to stay on top of the work-in-progress as much as possible so as not to have a Damac style surprise.

Seabee said...

The combination of factors is the problem - misleading, even fraudulent, renders; constant changes after sales have been made; lack of legal controls. That's an inevitable part of the sudden and unprecedented development boom I guess.

If anything was to be expected with Palm Jumeirah it was that the unexpected was bound to happen. No-one has ever tried to construct anything like this before so they really couldn't anticipate all the problems they encountered. (The other Palms and The World should be a little easier in the light of experience).

To meet the unexpected extra costs they've encountered they had to increase the number of dwellings...which meant a bigger population...which meant the planned road system wasn't big enough...which meant demolishing Interchange 5 and building a new one...which meant even higher costs...which meant more dwellings were needed...

And so it goes on.

Looking at it even now, with the new Interchange under way, the monorail planned, bigger access roads all round, I still don't think the road/transport system will cope at all well. Not only residents but all the hotel guiests will have only one way in and out. And for the first few years, they'll combine with construction traffic.

Not a place I'd like to live!