Dubai World Chairman Sultan Ahmed bin Sulayem
On Sunday the Dubai-based firm Limitless LLC announced the biggest real estate development in Russian history. The first phase of the Great Domodedovo project outside Moscow is expected to cost $11 billion, and Limitless will partner with Russian developer Coalco to build the new suburb. According to the International Herald Tribune, the project will require 44,000 acres (18,000 hectares) and will eventually include 150,000 residential and commercial units. To put that number in perspective for our U.S. readers, the Seattle suburb of Bellevue, Washington (pop. 112,344) has 48,396 housing units.
Limitless LLC is a subsidiary of the Dubai World holding company, which also owns Dubai Ports World. Russia Blog's American readers may recall that last year Congress rejected a DPW bid to operate several U.S. ports, citing national security fears. At that time, DPW spokesmen pointed out that their company had securely operated several ports that serviced U.S. Navy ships for years. However, Dubai World has shrugged off this setback, and Dubai continues to be one of the fastest growing cities in the world. Large construction firms based in the Emirates, like their Chinese counterparts, have a lot of experience building whole new cities from scratch. Now the “Singapore of the Middle East” is investing in another rapidly emerging market in Russia.
The skyline in Dubai, United Arab Emirates
Photo by: Tom Green
Russia Blog has previously reported on the shortage of quality housing in Russian cities and the real estate boom in Moscow. The previous record for foreign investment in a Russian real estate venture was held by the Chinese, who are building the “Baltic Diamond” residential/commercial complex and a major tunnel under the Neva River in St. Petersburg.
With Chinese and now Arab firms both building multibillion dollar developments in Russia, the question naturally arises: where are American developers?
Comments
With Chinese and now Arab firms both building multibillion dollar developments in Russia, the question naturally arises: where are American developers?
Laughing. Anyone who has lived in Dubai or dealt with Nakeel will know that they have a reputation for shoddy workmanship, unaccountable management, inability to control a budget, and a tendency to build giant white-elephant projects which nobody wants or needs.
In fact, I will bet that they will simply replicate in Moscow what they did in Dubai: build hundreds of half-million dollar apartments when what is actually needed is a load of low-cost or middle-income housing.
Posted by: Tim Newman | December 5, 2006 7:09 PM
Tim,
Thanks for your comment, coming from a former Dubai resident.
The development press release claimed that they will produce affordable housing for this new project, but I am not sure what that means in Moscow.
I did provide a link in the final paragraph to a previous Russia Blog post by Yuri about the shortage of affordable housing in Russian cities. That piece also has links to my review of "Super Homes: Moscow" which shows how ridiculous Moscow real estate prices have become.
Thanks again for checking in from sunnny Sakhalin.
Charles
Posted by: Charles Ganske | December 5, 2006 7:18 PM
Tim: "...they have a reputation for shoddy workmanship, unaccountable management, inability to control a budget"
Regretfully, the same can be said about a lot of US construction businesses. Look up, for example, Boston's "Big Dig" project, which is more than $10 billion (more than 250%) over budget and years behind schedule with allegations of substandard work and materials, criminal misconduct, collapses and thousands of leaks. By that criteria, it's probably a good thing for Russia that US construction companies are not very active there.
Anyway, this is a good news for Moscow area, hopefully this new development will bring real estate prices down somewhat.
Posted by: Petr Pustota | December 5, 2006 9:27 PM
Is nothing sacred? If it is going to be shoddy (or not) why let them in?
Posted by: Lois DuPey | December 7, 2006 7:09 PM
Hi,
i just want to say you are using my pic. If you like it visit my thread on skyscrapercity.com
http://www.skyscrapercity.com/showthread.php?t=203569
Posted by: Tom_Green | July 25, 2007 5:56 AM
Its pretty amazing, the way they are moving ahead. They have even invested big time in India.
Posted by: Dubai Real Estate | February 13, 2008 4:53 AM
We are doing liason work specially state
govt sector. If your co is interested to work in India please inform us so that we can discuss purposals in details.
Thanks
Posted by: R.K.Jain | June 13, 2008 4:09 AM