Santhosh Joseph
by Ben Roberts on Jun 18, 2010
As more milestones are met for the construction of Dubai Pearl, the company’s founder and CEO explains the evolution of the design and the future in which the project will take its place
Dubai Pearl has undergone more changes and reviews than perhaps any other big project in the region, at the same time riding the wave of fluctuations in the wider industry. A partial building, a demolition, an overhaul in design, two contractors, an ambitious grid system and a prime location make for one of the most interesting tales in the global construction industry.
Big alterations in projects have occasionally signaled difficulties financially, or with investors – and with the latter of these there have been some notable issues. But by June 2010 the site has reached its most striking chapter by staying on track and thriving as the industry regains a stable footing.
After reaching successful milestones in the foundation work last year, both developer and contractor are buoyant. The maroon signs on Sheikh Zayed Road indicating Dubai Pearl are a kind of herald to the future presence of the site, and the company is keen to emphasise its prime spot.
Its first selling point is that the Palm Jumeirah can be seen by residents, which is known not to be the case for those who actually live on the man-made archipelago. Indeed, even residents on the ground floor of the four towers in the centre of the project will have a good view of its striking outline, being in fact on the sixth floor above five floors of parking.
The issue of parking was central to the redesign, explained Santhosh Joseph, CEO and founder of the Dubai Pearl company, and indeed to a degree became representative of the changing priorities of the project.
“The original design was nine towers with a shopping mall in the middle, each was built from the ground, it was not a grid or on a car park up to level five, so the number of available car park spaces was a lot less.
“In the redesign Tecom demanded car parks, as it is a mixed use development, commercial space, retail space. We needed to provide 12,000 spaces as per regulations – we provided an additional 20%.” The current project will see 15,500 spaces.
A need for a “grand arrival”, too, for all motor based visitors, created the five-stories-from-ground-level concept. “You don’t want to be driving into a car park when you enter Dubai Pearl and then have to find your way to a first level. That is not a premium development, so in the redesign it is set on a grid system.”
Now, cars will be able to pass through the middle of the circular complex, but the residential and entertainment hemispheres either side will be totally pedestrianised – a distinctive element of the project. “One of the big challenges in Dubai is finding a place to park your car. The beauty is that it will be 100% pedestrianised, there are no vehicles allowed across the podium level.”
Residential space had sold up quickly during the boom years, and of the 1,445 homes in the 73-storey towers, 95% were sold. But at the beginning of this month it was revealed that some investors were given a 40% cut to the price of apartments bought at the height of the market, at the same time changing the split between office and residential space.
Joseph explains that the ability to offer the reduction came about based on a repricing of the construction cost of the project following renegotiations with the contractor. He has earlier been quoted as saying this was a reduction from nearly AED9 billion down to AED7.4 billion.
Tower1. Even residents on what will be the ground floor above the parking will have a good view of Palm Jumeirah.
“What we’ve done is renegotiated with contractors and the money from the saving we passed on to the customers who bought at the peak to bring them more in line with those who bought before the peak.
“This was achieved on done on a pro rata basis. We repriced the project to get to a median across the customers. What we didn’t want is a situation where someone’s paid 1,000 per square foot and someone who’s paid 1,500 per square foot. We took the savings achieved from the contractors and applied that across the board so everyone is almost at the same level.”
The project is now split as follows: retail takes up 15%, hotels 19%, and residential and offices taking up 42% and 24%, respectively, a shift from the 33% each type of occupancy had before.
The changing percentage of office space and residential space, based on a changing market, provokes a deeper line of thought for the two executives on supply and demand, and Dubai Pearl’s place within it. Joseph points out that Dubai last year saw an influx of 168,000 residents, around 9% of the population. “If you look at the total number of units being supplied in the next four years it will be less than that,” he says.
“What happened in 2008 was that there was a huge shortage of homes and rentals, and the offices rents were very high. Today the demand is not the same as 2007, it couldn’t last. Maybe by 2014 the supply will have been absorbed, because for 2014 to 2017 there are no supplies planned.
“What happened in 2007 or 2008 could not be sustained for very long. It’s not just a real estate issue, it was economic. A couple of years ago the focus on development shifted to just one sector of real estate. I’m sure in the coming years it will come back. If you look at the business parks and free zones and the latest things coming up in Dubai, it’s unmatched in the world [especially] if you look at Media City, Silicon Oasis, Studio City, Internet City, Healthcare city – there is a huge amount planned.”
He adds that developers who might have moved further into real estate during the boom years, or real estate developers that accrued many non-core assets, were now re-examining their business models.
“Everyone is now sticking to core objectives, things are shifting back and focusing on core values.”
Dubai Pearl nevertheless offers a breadth of services and opportunities. “Dubai Pearl is a real estate venture development... whether you talk about office space, retail, hotels, entertainment. It is in a true sense mixed use, completely integrated.”
Joseph adds that there will be a tram system that will link to the Metro.
A big question mark for Dubai Pearl concerns the AED100 million island it bought in 2008 that formed part of the Siberia section of Nakheel’s infamous The World project.
Joseph says management has yet to decide on the future of the island, known as ‘Archangel’. “We’re not decided as to the plans for that,” he says. “We’re looking to create that as the beach access for Dubai Pearl. [Now] the plan is to complete Dubai Pearl.”
Work continues apace on site. The percentage of office and residential space has changed in line with market conditions.
THE LOWDOWN: The project that would survive the crash
Dubai Pearl is seven years in the making, conceived in 2003 when the emirate’s property market was on its world-beating ascent. The project was launched by Qatar-based Omnix Group, with the Technology, e-Commerce and Media Free Zone (Tecom) in the heart of the Tecom area as a ‘self-contained community’ at an initial cost of AED3 billion.
The original nine towers contracted to Arabtec were a statement of intent to providing the best view of the Gulf in a central location. Since, investors of almost 40 nationalities flocked to the site, tempted by views of the ethereal Palm Jumeira development.
Delays to the project caused master developer to Tecom to turn the whole project on its head, halting what work had been started, selling the project to the Al Fahim Group in Abu Dhabi, and re-examining what exactly could make the 6.096 million m2 area unique – and sustainable, in every sense.
By October 2007 Pearl Dubai FZ LLC, a company owned by the Al Fahim Group, was in charge of the project, swung a wrecking ball at the few floors that had been built and set about making the redesign a reality.
In November 2008 Al Habtoor Leighton Group was confirmed as the new contractors, beginning construction in the following February. 2009 saw the consecutive completion of the raft pouring for all four of the towers.
Dubai Pearl was designed by German architect Professor Peter Schweger of Schweger Associated Architects. The pioneering column-free design will create 20% more useable space than the standard in the region, the company says.
Al Habtoor Leighton Group recently announced that it had opened its doors for tenders for the mechanical, electrical and plumbing (MEP); aluminium and glazing (façade) work on the project.
The process is scheduled to be finalised by 16th September 2010. >>
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