Amid solid economic prospects, driven by constant high oil prices and relative political stability, developers in the Gulf Arab region announce on an almost daily basis new mega projects worth billions of U.S. dollars, with the Emirate of Dubai taking a lead.
The biggest Middle East developer Emaar Properties from Dubai and the state-owned investment firm Dubai Holding said earlier on Monday that they had entered a joint venture to built The Lagoons, a residential and hospitality district adjacent to the world's largest man-made lagoon in Mohammed Bin Rashid (MBR) city, a planned new "city within the city."
According to the e-mailed statement by both entities, The Lagoons is a waterfront city spreading over 6 million square meters. The project just came one day after the Dubai-based developer Crystal Lagoons said it will build for 7 billion U.S. dollars the world's largest man-made lagoon water reservoir with a surface of 40 hectares in the heart of Dubai.
Led by the Dubai Tourism Vision to record 20 million visitors by the turn of the decade, the project will help firmly establish Dubai as one of the top 10 global cities by 2020, said the statement.
Competition for global attention is fierce in the Gulf region, as the six Gulf Cooperation Council (GCC) countries are stepping up efforts recently to launch new residential, commercial and infrastructure projects amid a positive economic prospects in this region.
Last Saturday, the International Monetary Fund (IMF) expected the region's gross domestic product to grow at 3.7 percent this year, which would be lower than the exceptionally strong average rate of 6.4 percent in the year of 2010-12, "but favorable by global standards."
US crude oil prices have gained over 15 percent in the last 12 months, feeding the GCC states' budget surpluses.
Meanwhile, the two major oil suppliers Saudi Arabia and Kuwait are accelerating construction on the two landmark towers which are poised to become the tallest buildings in the world.
Saudi started in Jeddah at the Red Sea the Kingdom Tower which shall have the oriental height of 1001 meters, whose construction would last for six years. The northern Gulf state of Kuwait also builds a record-breaking high tower, the Burj Al-Mubarak Al-Kabeer, which shall also have a height of 1001 meters.
At the end of July, the Saudi capital Riyadh awarded contracts worth 22.5 billion dollars for the construction of the Riyadh metro. The driverless system that spreads on a network of 176 kilometers length shall help ease traffic in Riyadh's chronically congested streets.
Nevertheless, progress in building is not always a ride on the fast lane. The gas-rich Gulf state of Qatar had to postpone the opening of its mega project, 5,400-acre New Doha International Airport last month due to a legal dispute with Dubai-based interior design firm Depa, as both sides blame each other of alleged delays in the inner fit-out work.
The real estate boom is also visible in leading developers' profits. Earlier in the day, Dubai's state-owned company Nakheel announced that it generated in the first nine months of this year a net profit of 1.77 billion Dirham, or 482.68 million dollars, representing a year-on-year increase of 58 percent. The surge was driven by "a return of investor confidence," Nakheel said in a statement on its website.