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$2.5B DUBAI FESTIVAL CITY A ‘CITY WITHIN CITY’

BY DEBRA HAZEL

When Al-Futtaim Group unveiled plans for its massive Dubai Festival City in 2001, it promised a “city within a city.” As the 70 million-square-foot project progresses, it appears that the Dubai, United Arab Emirates-based development firm is living up to its mission.

Dubai Festival City comprises so many elements it is hard to know where to begin describing it. The $2.5 billion, 1,600-acre project, located on the Arabian Gulf, will contain about 2 million square feet of retail, 19,000 residences, office and hotel space, and a marina, all of it along the northeast bank of the man-made Dubai Creek.

“We’re building a downtown, with neighborhoods and villages,” said Philip McArthur, CSM, Dubai Festival City’s director of leasing and marketing.

Overall, the project’s 70 million square feet will include several retail centers and an automotive park. The Ras Al Khor Bridge, now under construction, will feed directly into Dubai Festival City, and the existing Al Garhoud Bridge is nearby too.

The developers expect to be finished with the entire complex sometime in 2012. A town house community with a golf course opened last year as the development’s very first element, and residential build-out is to continue in phases through 2008.

Retail fusion
Retail construction began in June, and the heart and soul of Dubai Festival City may well be the $700 million Festival Centre, which combines traditional mall stores, big boxes and restaurants along the 2.5-mile waterfront.

“We’ve been calling it a fusion center,” McArthur said.

The first retail phase, the 1.1 million-square-foot Retail Park, is the region’s first big-box development. Anchoring that will be a 280,000-square-foot Ikea, the largest in the Middle East. An atrium will link Ikea to a hypermarket (still unnamed at press time), and the two are scheduled to open in September. The smaller tenants, including Ace Hardware and some home furnishings stores, will follow next April.

A three-level, enclosed mall, also spanning 1.1 million square feet, constitutes the final retail phase. The Crescent, as the mall is called, is slated to open in September of next year and will house about 300 retailers, including anchor Marks & Spencer, a 40,000-square-foot Paris Gallery perfume emporium and a 40,000-square-foot Aishti department store (“the Saks Fifth Avenue of Beirut,” according to McArthur). Gap, Mothercare World and Nike will be among its smaller tenants. The Boulevard, a street-front development with 20 of the internationally known stores typically found on the grand shopping boulevards of Europe, will attach to the Crescent.

Open-air entertainment will be an important part of the project too. Four waterfront pavilions will offer 100 shops and kiosks in four themes: Celebrate Food, Kid’s Town, Maritime Experience and Trade Routes. Canal Walk, connecting to the waterfront promenade, will contain 40 waterside cafés and restaurants. Visitors can even get to the shops and cafés by water taxi.

Festival Square, a waterside performance space spanning between 40,000 and 50,000 square feet, will function much as a traditional mall center court, “but it will be four times the proportion,” McArthur said. “I see it being used for community events.” He equates the space to Rome’s Spanish Steps, where people gather simply to watch other people.

To help shoppers stay cool, an air-conditioned walkway will connect the Festival Centre and the Retail Park, and they will have 12,000 parking spaces, 6,500 of them underground.

The InterContinental Hotel, with 370 rooms, 80 executive apartments, and retail of its own, is nearby and the Four Seasons will open a 250-room hotel and spa within a mile of the site.

Even the project’s multicolored, circular logo reflects the complex’s various uses. It “shows a meeting of the land and water, sand and sun, of life’s possibilities,” McArthur said.

City on the rise
In time, about 77,000 people will be living and working at Dubai Festival City, the developer says. To accommodate families, many of whom will be expatriates, Al-Futtaim is building school facilities, and those are scheduled to open this year.

According to Al-Futtaim, Dubai Festival City is the largest privately funded, mixed-use waterfront development in the Middle East. It is far from the only development in Dubai, though.

According to Al-Futtaim, Dubai’s population, now 1.2 million, is growing at about 8 percent annually, with GDP per capita averaging about $19,000. The developers believe their basic trade area extends to the greater region, however.

“The economy is booming,” said McArthur. “The other factor is tourism. Business travel and vacationers have been growing at 15 percent per annum. The five-star hotels are jammed.”

Dubai’s rulers have been carefully promoting the city as a beach resort to most of the Middle East, as well as Africa, Europe and India. The city could get as many as 10 million visitors a year by 2010. Dubai Festival City is located just over a mile from Dubai International Airport, which is being expanded rapidly to accommodate travelers from around the globe.

Which helps to explain the development frenzy.

“Who knows? It’s an extraordinary place,” said Simon Thomson, the principal partner of Retail International, a London-based shopping center consulting firm that specializes in the Gulf region. “If you look back 30, 40 or 50 years, you’d see development projects where people would have said you were crazy. But the place seems to succeed.”