Editor’s note: Students in the MRED Program are traveling around the world – literally! Seven graduate students had the opportunity to travel west as part of an immersive study abroad class in summer 2016. Here is a post from Elena Barlow, one of the students on the journey.
Today our itinerary consisted of a combination of both tourist attractions as well as a business meeting with Daniel Hill, senior director of shopping malls for Majid Al Futtaim, specifically regarding the Mall of Emirates redevelopment.
In the morning, we planned on not departing our hotel until 10 a.m., which allowed us to catch up on some sleep and have a morning to relax. Our hotel had a swimming pool on the roof at the 43rd floor, so some of us went up and swam and relaxed by the pool. After breakfast, we followed Mr. Marshal, our tour guide from India, into the van and set off to visit the sites in Dubai! Our first stop was in a residential district along the coast.
As we approached the area, we all were quite amazed of the area due to the amount of buildings in the area, the large man-made marina, the yachts, and the shops. However, the most shocking part was how empty the walkways, shops, buildings and streets were. The area is an incredible developed area with millions of residential units, but there were hardly any people.
We got back in the van and went to see Palm Island, the manmade island in the shape of a palm tree on the coast. We decided to take the monorail out there to get a better view as we traveled to the end of the island. It’s incredible the amount of the development underway on the palm right now. A large mall, hotels, and more residential structures will come online in the near future.
At the end of the monorail ride, we stopped at the Atlantis Station where there is an Atlantis hotel complete with 1,400 hotel rooms and a large water park (it was close to 100 degrees Fahrenheit, so that lazy river was looking pretty good to all of us). Mr. Marshal met us at the Atlantis, and we drove back, returning under a tunnel that went deep under the water to allow for large ships to have clearance to pass through the canal overhead.
Our next stop was at the Mall of the Emirates, but before we go into that, here are a few ‘fun facts’ about what we saw and heard while we drove through Dubai:
- It has— air-conditioned bus stops. In the months of July and August, it is common for temperatures to reach above 115 degrees Fahrenheit with 95 percent humidity.
- Each emirate (state) is led by a family that chooses the political leaders.
- Abu Dhabi has a lot of oil but Dubai does not, so Dubai makes basically all of its money on development and tourism.
- The first large building was built in 1997 at 39 stories tall and was the tallest building in Dubai at the time, meaning the entire city is basically less than 20 years old.
- All new or foreign businesses must be partnered with an Arab who has at least 51 percent ownership in the business.
- The population of Dubai is roughly 2 million, and about half of that are Pakistani and Indian migrant workers.
We were told the population of people from Dubai is about 20 percent, but we’ve also heard that the actual number could be closer to 10 percent.
Now, if we think of all the units existing and the units coming online … with only about 1 million people who actually live in the city with the capacity to lease or buy a unit, we are forced to wonder if this is at all sustainable.
We arrived at Mall of the Emirates and made our way to the management office by the Sheraton Hotel where we met Daniel Hill. We had an incredible meeting where he explained how they were planning on expanding the mall by 30,000 square meters of Gross Leasable Area. Their plans were to literally add another floor to the entire building and are going to renovate the entire mall. With this endeavor, Daniel mentioned some key issues that they have had to overcome through this process.
A major issue is, it is against the law to evict or kick out a tenant for any reason, unless they provide equal valuable space to the tenant somewhere else. Since there are quite a few tenants who they aren’t looking to maintain in the space, their only option has been to buy the tenants’ businesses out. Daniel mentioned that they will have bought out around 90 stores. So far, they have completed Phase 1 of the expansion and renovation and they have received a 21 percent Internal Rate of Return compared to their projected 16 percent. Daniel was incredibly knowledgeable, professional and open as we asked questions, and we all really enjoyed our visit.
After our meeting, the group decided to split up to each see different areas before our 7 p.m. dinner. Mr. Marshal already had our dinner appointment scheduled for us to eat on a boat as it trolled through the man-made seawater canal they term “the creek.” We all enjoyed a variety of buffet-style Middle-Eastern cuisine as we rode through the creek listening to music and observing a traditional dance. Michelle and Ellena both were invited to participate in the traditional dance, and they were both great sports about it.
Overall, Dubai was an incredible eye-opening experience for all of us from both the culture aspect as well as the real estate development aspect. Being in Bangalore, India the day previously, there could not have been a greater contrast for us all to experience. It will be exciting to see what is in store for Dubai, UAE in the years to come. Off to London!