It has been touted as one of the most exciting Dubai mega-projects of recent years and has now come to fruition.
The $735m Dubai Water Canal — carved out of land between Business Bay and Jumeirah — opened to the public last month, creating a water-bound ‘mini-Manhattan’ that flows from Downtown Dubai to the ocean.
The 3.2km-long canal is the final segment of the Dubai Creek extension, terminating in the Al Wasl-Jumeirah 2 neighbourhood and essentially siphoning off the Burj Khalifa, Business Bay and Dubai International Financial Centre (DIFC) districts.
The canal opens up new possibilities in marine transport, Dubai’s leaders say, as it connects the historic areas of Deira and Bur Dubai through an extended waterway from the Creek to the coast.
Meanwhile, the adjacent canal side is set to become a lively new hub for living, leisure and entertainment as the surrounding area is developed.
The Dubai government says it expects the canal will generate hundreds of new residences and over 80,000 sq m of public facilities, including 6km of walkway, a 3km-long jogging track and 12km of cycling tracks, as well as shops, restaurants and other recreational facilities.
A host of real estate developers are already jostling for a piece of the action, with Dubai Properties this year unveiling plans for the Marasi Business Bay mixed-use scheme spanning 12km of waterfront promenade alongside the canal.
Another developer hoping to reap lucrative returns as the area springs to life is Dubai’s Omniyat Group. It already has a number of projects in planning or under construction in Business Bay and Dubai Downtown and is packaging together a pipeline of future schemes.
A number of real estate companies are seeking to capitalise on Dubai Canal’s strategic location.
On a blustery day in December, Arabian Business joins Omniyat on a boat cruise down the new canal, where the developer outlines its plans.
Starting at Dubai Creek Marina and passing the Ras Al Khor Wildlife Sanctuary, we weave through Business Bay and under the elevated section of Sheikh Zayed Road — a new bridge complete with a waterfall that can be switched off when boats pass underneath.
“We were one of the first developers — if not the first — who started investing in the Canal area in 2004 when plans for Business Bay were first announced and we acquired four plots of land,” says Mahdi Amjad, executive chairman and founder of Omniyat.
“We saw the opportunity very clearly, right from the beginning, of the Creek being extended and the whole Burj Khalifa/Business Bay area becoming a high-value central business district. Downtown is already the hub of Dubai.”
To date, two of Omniyat’s projects have reached completion — The Binary, an office building delivered in 2015, and Bayswater, another commercial scheme delivered in 2010.
The Pad — Dubai’s answer to Italy’s leaning tower of Pisa — is a 253-unit residential tower tilted at a 6.5-degree angle and scheduled for handover in mid-2017. It is more than 80 percent sold, Amjad says.
Meanwhile, The Sterling is a two-tower residential scheme positioned closer to the Burj Khalifa District and scheduled for delivery in 2018.
Nestled close by is The Opus, Omniyat’s striking collection of residences and an ME by Melia-operated hotel, all designed by the pioneering late architect Zaha Hadid and costing $680m to build, according to Amjad. The first phase of the project is complete and the rest scheduled for delivery in the first half of 2017.
Further back in the Burj Khalifa district is Omniyat’s $273m Langham Place Downtown, a five-star luxury hotel with serviced apartments, scheduled for completion in 2018 in partnership with Langham Hospitality Group.
As we continue to cruise along the canal, Amjad points out a vacant plot of land on the edge of the widest section of the waterway, in the heart of Business Bay. This land has been earmarked for another, as-yet-unannounced, project that will be the most upmarket of Omniyat’s canal-side hotel schemes, he claims.
Dubai Water Canal is expected to attract more than 30 million visitors annually, according to the RTA.
“We have a hospitality product that we will be announcing in the first half of 2017. This will be an extremely unique offering — one of our ‘ultra-prime’ projects, which will be a mix of hospitality and a serviced residential component,” he says.
The project will also comprise high-end retail and food and beverage outlets, and is the largest canal-facing project to date, with over 220 metres of waterfront, Amjad adds.
He declines to reveal further details, including the name of the hotel operator and how many rooms the scheme contains, but says: “We are seeing clear-cut demand for two tiers of luxury real estate in the Dubai Water Canal area.
“The first tier is what we consider a product range priced at around AED3,500 ($952) per square foot — these are your ‘ultra-luxury’ products such as The Opus, One Palm [another Zaha Hadid-designed scheme on The Palm Jumeirah], and more to come [including the forthcoming canal-side hotel scheme].
“Of course it’s a segment that’s very niche and unique and over the past ten years Omniyat has only produced two such products, and in the next year you will see us addressing that segment again.
“I think there’s always a market for this type of real estate because the supply is extremely limited and even though many developers attempt to provide it, there are only a very few who can really satisfy the expectations of that customer base. It’s not easy to do.”
The second tier, says Amjad, is simply ‘luxury’ — a “proper, CBD-located residential product” priced at between AED1,800 and AED2,200 ($490-$598) per square foot. “You can do both these types of products in the Dubai Water Canal area,” he says.
Omniyat has $2.4bn worth of properties either delivered, in construction or about to start construction, across 16 plots of land in Business Bay, and is seeing demand from buyers across the globe, particularly from the Gulf and the Indian subcontinent. Its entire Dubai portfolio comprises $4.3bn of already completed or announced schemes.
However, Amjad reveals that the group plans to launch an additional $1.36bn project pipeline over 2017-18. The new package of projects is to be announced from the first half of 2017.
As well as luxury and ultra-luxury schemes, Omniyat’s pipeline contains projects targeting the midmarket segment in locations such as Dubailand and Sheikh Zayed Road.
“We are looking to create the same premium offering for the mid-segment of the market and are examining opportunities in locations where you can do these kinds of price points,” Amjad says. “That is more over a four-to-five-year horizon, though; we are focussing predominantly on the [canal] right now.”
Financing is in place for the next five years, Amjad says, adding that Omniyat has no plans for an initial public offering (IPO) or any other major capital raising project at present.
“We are always in talks with our banks, and every year we have our loan book that rolls over and produces new loans; we have our equity and investor partnerships, and we have our own [reserves], and I think we’ve been quite conservative when it comes to our business model and funding.
Omniyat Group was among the first investors to acquire land at the Dubai Canal project in 2004.
“We have a very low gearing in our balance sheet and it will be easy to borrow over the next five years as and when is required. Then, as the portfolio is delivered, it will release a lot of equity that we will reinvest back into [Dubai]. We are a big believer in the city and this is not a short-term game for us.”
Amjad, an Iraqi national, moved to Dubai 24 years ago and says he has seen the city evolve significantly over that time.
“I remember back then if we hit 5 million tourists [per year] that would be phenomenal; now, people are talking about 20 million.
“With the city’s [geographical] positioning, current passenger arrivals, GDP and trade growth, I believe this is possible — and that’s despite pressure points such as the low oil price, currency drops in the Russian rouble and British pound, and other challenges that definitely surround the region today,” he says.
As Amjad cruises along the canal, he considers its public opening as only the mouth of what is an ocean of opportunity in this part of Dubai.