Wednesday, August 16, 2006

City of Cranes

Dubai's historic importance as a center for gold trade - a legacy that endures to this day in the city's shimmering Gold Souk - is the reason why the city has adopted its "City of Gold" moniker. But this Emirate's official nickname really should be "City of Cranes.” Nothing represents this city better than a construction crane, for this is, quite literally, a city under construction.

Depending on who you ask, somewhere between 15 percent and 25 percent of the world’s supply of tower construction cranes are currently located within this Delaware-sized city-state. If that seems hard to believe, it's because the amount of construction here is hard to believe - even when witnessed first-hand. The unreal construction frenzy currently underway in Dubai is unlike anything occurring anywhere else in the world. In fact, I'd go so far to say that this collective development effort, in terms of the sheer volume of structures being built at one time, is an event unmatched in human history. It's truly mind-boggling.

Construction sites are everywhere, and just about anything and everything is being built: office towers, condominium high-rises, apartment blocks, hotels, houses, hospitals, roads, bridges, airport terminals, schools, shopping malls, industrial parks, even a Metro (which is, of course, the reason why I’m here). They're even building man-made islands off the coast. Go to any vantage point in the city and you'll see clusters of construction cranes as far as the eye can see in every direction. The Dubai construction frenzy, furthermore, isn't physically limited to Dubai: it's occuring in aircraft plants in Seattle and Toulouse as well because Dubai's airline, Emirates, has over 100 passenger jets currently on order with both Boeing and Airbus.

As one of my co-workers joked, “this place is going to look really nice whenever they finish it.” But when will Dubai be "finished?" With new developments being announced on a daily basis, this construction frenzy appears to have no end in sight. Investors and developers from all around the world are jumping on the Dubai construction bandwagon, trying to get a piece of the action.

As I've asked on my Dubai page: is this incredible amount construction really warranted? Can all these new hotels, apartments, offices, condos, golf courses and shopping centers really be absorbed? Or is this fury of creation nothing more than a speculative bubble that is one day going to burst, leaving in its wake an economically-shattered city of half-built towers and abandoned developments? If Dubai builds it, will they really come?

Nobody can predict the future, of course, but right now, they're definitely coming. The same co-worker estimated that, since he was last in Dubai in November, this city has probably added somewhere between 200,000 and 250,000 residents. Soaring demand is placing considerable upwards pressure on housing prices. Cars choke this city's hopelessly overtaxed transportation network and new roadway construction cannot keep up with demand (and the first line of the Dubai Metro won't be open until 2009). Shopping malls are packed with people; finding hotel rooms is oftentimes difficult. People clearly want to be in Dubai, and as long as that demand is there the profilgate construction will contonue.

The only limit to this frenzy, it seems, are the number of construction cranes available.

1 comment:

Thomas said...

Interesting point. I don't know Dubai's exact elevation, but the city is on a coastal plain, so it's probably not particularly far above sea level.