Could this be a case of too many dollars and too little sense?
In yet another attempt to do everything even bigger than they do in Texas, Dubai has announced plans to build the planet’s largest shopping experience, the “Mall of the World.” They are hoping to receive 180 million visitors per year and have plans for accommodating those visitors in style. The 8 million square foot mall will total 48 million square feet with a temperature controlled support “city” of hotels, theaters, a theme park, and even accommodations for “medical tourism.”
This is not the first mega-project, nor even the first mega-mall, undertaken by the United Arab Emirates (UAE). From 2004 – 2007, construction exploded in Dubai, with plans for a number of ostentatious projects of theme parks, the world’s tallest building and even marinas and floating islands shaped like palm trees. But Dubai experienced an economic decline along with the rest of us and many of the most audacious and impractical projects were sidelined.
However, they have made a strong economic recovery in recent years and now desire to shift from an oil based economy to one of culture and tourism. UAE has been attempting for some time to attract wealthy international investors to buy in on the rapid development taking place that depends on an equally rapid appreciation of the real estate market there. In fact, home values are up more than 30% and the UAE sees itself as the servicer of its 2 billion neighbors in the region.
Dubai will be the first Middle Eastern city to host the World Expo in 2020, and that adds even more incentive to move forward with developmental plans to support the event as well as the every desire of the attendees.
Water is surely a premium desert resource, since you can’t drink oil and they don’t get rain. It naturally makes sense to create oases with amenities in a centralized hub rather than construct a desert sprawl. And I’ve seen many commendable ideas at growing food and producing energy with little water input. But the grandiose scale of this project boggles the mind. I suppose that’s the idea, to be jaw dropping.
There is concern, however, by the International Monetary Fund (IMF) and others in the business community that Dubai’s bubble is about to burst in the real property sector and that such a mega-scale project could throw it into turmoil. In early July, Dubai stocks crashed, most likely the result of ongoing troubles at Arabtec Holding Co., the largest UAE property developer. And the current turmoil in the Middle East only casts even more doubts for prospective investors.
You thought they do everything bigger in Texas? Well, move over Texas ‘cause here comes another desert land with oil underground that wants to steal your largess.
So it seems that only time will tell whether this Mall of the World will turn out to be a successful respite from reality or, rather, a shop-till-you-drop-or-the-bubble-pops debacle.