$1bn Real Madrid RAK resort 'indefinitely' on holdby Shane McGinley on Jun 27, 2013
Development of a $1bn Real Madrid Resort Island planned for Ras Al Khaimah has been put on hold indefinitely due to a lack of funding, sources have said.
The project, which is a joint venture between Spanish football team Real Madrid, the government of Ras Al Khaimah and Luxembourg-based RAK Marjan Island Football Investment Fund, was announced in March 2012.
Plans for the 50-hectare resort included a theme park, a stadium and a museum dedicated to the Spanish club, sports facilities and residential units and a luxury hotel. Construction has still not started and sources said the original January 2015 opening date had now been scrapped.
“Building won’t start any time soon,” a spokesman from the RAK Investment Authority was quoted as saying by UAE-based Sports Talk magazine. “Plans are indefinitely on hold. The resort stands no chance of opening in January 2015, if at all.
“We have been searching for funding over the past two months, but due to harsh economic times none has materialised. We haven’t totally abandoned the project, but it will need fresh backers, since we were banking on promised funds from France and Luxembourg. Even if we got some today nothing would be open until the end of 2016, at the earliest.”
Club officials at Real Madrid, which last month signed a five year shirt sponsorship with Dubai’s Emirates Airline, was also unclear as to the status of development on the project.
“We only lent our brand to the Real Madrid Resort Island,” club president Florentino Perez said. “Real Madrid did not contribute financially. We hope the resort is completed in a timely and cost-effective manner, but right now that looks unlikely. We wanted a base in the UAE to bring us closer to our MENA and Asian fan base, but that may not be possible now.”
In March last year, developers behind the ambitious $1bn project were confident the project would start construction by the end of 2012 and would be completed by 2015, despite admitting they had not yet secured any funding.
“This is such a unique project, that I don’t see any drawbacks in people being attracted to funding,” CEO of the venture Louis Armand De Rouge said.
“The only problem I think we might be faced with is selecting investors. It’s not so much about whether we’ll have the money to make it but who is going to participate in the project. We already have people who want to buy most of it.”
The resort was set to be the first tourism complex built under the Real Madrid trademark, and was expected to help boost tourism to the northern emirate, which generates significantly less from tourism activities than Dubai and Abu Dhabi.
De Rouge said he expected around one million visitors per year and for developers to break even within three years. “We expect it to be profitable,” he said. “In the first three years we should be more than breaking even.”
Ras Al Khaimah was chosen for its history of stability and investment, and its close proximity to Dubai, he said. The UAE itself was seen as a strategic location which would allow Real Madrid to tap into its current target market, the Asian Pacific.
The announcement certainly had an immediate positive impact for Ras Al Khaimah as yields on its Islamic bonds fell to the lowest in six months soon after the news broke.
Ras al Khaimah, which has little infrastructure compared with Dubai and Abu Dhabi, attracted 835,000 visitors in 2011. By comparison, Dubai drew 9.3m with attractions such as the world’s tallest tower, palm-shaped islands and indoor skiing.
The emirate’s 40 hectare real-estate project on the artificial Marjan Island will also include a marina, yacht club and a Real Madrid museum as well as a football training academy. The centerpiece of the resort will be a soccer stadium in a half circle facing the sea.
Real Madrid was ranked the highest earning football club in the world for the eighth consecutive year after taking, with revenue of $650.5m in 2012, according to an annual report published by Deloitte.
- Turkey's $1.2bn hospital in financial close
- UAE contractor Cloisall secures $190m order book
- Governor denies $22.5bn Saudi Riyadh Metro delayed
- UAE: Nakheel opens Dragon Mart Phase 2 expansion
- Cat reviews Middle East legalities for drone deal
- Revealed: Mall of the World plans to press ahead
- Dubai: Ailing Falcon City of Wonders back on track
- Core UAE: Dubai can handle more megaprojects
- Construction underway at Bahrain Airport terminal
- QP to buy shares in Moroccan offshore blocks