Rules to help ideas flourish

It's only the second week of the new year but the creative minds of aspirational property developers have been ticking away - sparking what could be a return to the wacky project idea era that marked the early stages of Dubai's development boom.

It's only the second week of the new year but the creative minds of aspirational property developers have been ticking away - sparking what could be a return to the wacky project idea era that marked the early stages of Dubai's development boom.

A couple of press releases have been doing the rounds, announcing ideas that no longer leave residents of the emirate fazed, yet still manage to attract a fair amount of attention.

The first development is one hoping to replicate the look and feel of the French city of Lyon. To carry the awe-inspiring name of Lyon-Dubai City, the project will feature public squares, outdoor cafés and restaurants - not that there are many of those here.

One can't help but wonder if building another Paris in the desert might have been a more attractive option; although there must be a smidgen of market data out there somewhere suggesting that Lyon - and one that's in Dubai - is actually a sought-after place to live.

The second development made public this week was Isla Moda, otherwise known as Fashion Island.

To be built as part of The World, this debut into haute couture construction will feature a resort dedicated to fashion, themed villas and top-of-the-range shops, sorry, boutiques.

With this in mind, it would appear that the small matter of rising construction costs - something else that has made the news since the turn of the new year - has eluded some developers.

It's a shame the same can't be said for contractors.

Those in construction are feeling the pinch of inflation on a monthly basis.

The price rises are no longer confined to building materials; the cost of housing workers is going up all the time, while overall recruitment has become
more expensive.

VAT and a possible minimum wage will also add to the burden.

Talk of negotiating price escalation clauses into contracts emerges whenever contractors are asked about how they might be shielded from price hikes.

Now could be the time for a serious revision of the terms and conditions to balance financial risk more evenly.

And it might be the only way projects like Isla Moda and Lyon-Dubai will ever get off the drawing board.

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Sep 01, 2020