Ajman restarts scaled-down Al Zorah project
Resort has been cut in half to match new economic realities, says CEO
Al Zorah Development Co, Ajman’s state-backed tourism project, has restarted work on its AED4bn ($1.1bn) flagship resort after cutting the size of the development by half.
The luxury Al Zorah Resort was designed as the crown jewel of the AED220bn Al Zorah City development, Ajman’s largest project, but was suspended after the collapse of the emirate’s real estate market in late-2008.
“AED4bn was the original capital. We reduced the size of the project and land area and eliminated the islands that were supposed to be reclaimed,” said Imad Dana, chairman and CEO of Al Zorah.
The original resort was forecast to be home to 200,000 people on completion.
“We have reduced everything by 50 percent,” said Dana.
Some 70 percent of the development, a joint venture with Beirut’s Solidere International, will comprise of tourism and leisure facilities. The first phase of the project will include four hotels and marinas, and will be funded by the company.
The venture hopes to attract capital to fund the remaining stages of development, said Dana, from investors keen to secure a slice of the UAE’s AED115.4bn ($31.4bn) tourism market.
“We will build [the first phase]. We are not selling now; we are not looking for investors now; we are not borrowing now,” he said.
“We will take two years and then people will see if is not a plan anymore, it is reality. We believe once we invest and show the world that we have invested, and it is up and running, opportunities will arise for investors to come.”
Nasser Chammaa, chairman of Solidere, said the companies had shortlisted hotel brands to operate the four properties and said individual operators would be announced in January.
Abu Dhabi’s Rotana Group and Dubai’s Jumeirah Group are among the candidates to operate the hotels, a source said.
Ajman’s property market was badly hit by the onset of the financial crisis in late-2008. Scores of investors were hit when the emirate’s offplan market collapsed in late-2008, sending house prices tumbling. In the $15bn Emirates City development alone, more than a dozen projects are on hold, affecting hundreds of buyers.
Ajman Real Estate Regulatory Agency (ARRA), last month told Arabian Business around 40 percent of offplan investors had switched their cash to units in projects nearing completion.
The emirate’s property watchdog has also pledged to reveal a list of the Ajman’s scrapped real estate projects by early-2012.
Chammaa said the venture was confident Ajman’s growing tourist industry would help offset investor concern over the emirate’s struggling property sector.
“The numbers are encouraging,” he said. “The first phase is to show what we are trying to build, the vision we have subscribed to. We are working tirelessly to add value to the project and position it as a serious investment destination.”
Basel Abu Alrub, managing partner of Dubai-based Utravel, said the northern emirates attract a high number of tourists.
“You will be surprised at the sheer size of CIS and European business it gets. If you go to Fujeirah now you will find it packed with Russians. Ajman will offer a cheaper alternative to the more expensive Dubai resorts. These Emirates have their own clientele and are doing very well in growing their tourist base,” he said.
When asked about the project going forward, Dana said it was “too soon to talk about profitability” but he was still confident in the project’s long-term future.