Dubai Holding announces plan to build ‘Mall of the World’

DUBAI — Dubai is planning to build a temperature-controlled city featuring the world’s largest mall and an indoor park, as well as hotels, health resorts and theatres, the developer said.

Already home to one of the globe’s biggest indoor shopping complexes, Dubai Mall, the glitzy emirate known for its love of grandiose projects said it is now planning to build the “Mall of the World”.

The all-pedestrian complex would occupy a total area of 4.45 million square metres, said Dubai Holding, the developer owned by Dubai ruler Mohammed Bin Rashid Al Maktoum.

The project “will comprise the largest indoor theme park in the world” under a glass dome that would be opened during winter, it added in a statement.

The seven-kilometre long promenades connecting the facilities would also be covered and air-conditioned during summer, it continued.

“Our ambitions are higher than having seasonal tourism. Tourism is key driver of our economy and we aim to make the United Arab Emirates an attractive destination all year long,” said Sheikh Mohammed.

“This is why we will start working on providing pleasant temperature-controlled environments during the summer months,” he added.

The statement issued late on Saturday did not say when construction would begin, nor did it reveal the cost of the project.

“The project will be built in phases in alignment with the gradual growth of family tourism in Dubai,” said Mohammed Abdullah Al Gergawi, chairman of Dubai Holding, which is Sheikh Mohammed’s personal investment vehicle and will develop the project.

Dubai hopes the “Mall of the World” can attract more than 180 million visitors each year.

The emirate is known for its numerous malls and many hotels, including the Dubai Mall, touted as the world’s largest shopping, leisure and entertainment destination. It is also home to the world’s tallest tower, Burj Khalifa.

Dubai has established itself as a global hub for air transport and transit trade, as well as a regional financial centre.

And it beat off opposition from Brazil, Russia and Turkey in November to win the right to host the World Expo trade fair in 2020.

The emirate’s economy was hit in 2009 by the global financial crisis, but it has since made a strong comeback, thanks to growth in the trade, transport and tourism sectors.

Separately, the International Monetary Fund (IMF) recently called on Dubai to take “stronger measures” to avert another property bubble, after prices rocketed at a rate reminiscent of the 2009 crisis.

Authorities in the Gulf emirate have already doubled sales duties to 4 per cent, and the central bank of the United Arab Emirates has tightened lending facilities.

“These measures are good,” said IMF Regional Director Masood Ahmed, adding, however, that there was a need for even tougher steps.

“It is time to consider stronger measures particularly in ways to discourage a quick turnaround,” Ahmed told a forum in Dubai, warning of renewed market activity aimed at fast profits.

He suggested increasing sales duties substantially to prevent such activity, citing Singapore’s 30 per cent tax on sales made within a year of purchase as an example.

“I think it is time to consider some stronger measures to try dampen what could possibly be speculative transactions in real estate,” he said.

The market remains “mostly a cash market” for the moment, he added, warning that if lending to the sector sees a big increase, tightening measures would be needed.

Dubai’s property sector expanded at breakneck-speed for years, driven by foreign investments, before the global financial crisis pushed it into free fall, shedding half of its 2008 records.

But the market has recently made a strong comeback as investors flocked back into the emirate that is seen as a safe haven at a time of regional turmoil.

Contrary to most Gulf monarchies, the sheikhdom has sizeable property zones that have been opened to foreign buyers.

The real estate sector has been recovering as Dubai’s trade, tourism and transport have continued to grow, banking on large investments in the past few years.