Dubai-based Nakheel, the company behind the world famous Palm Jumeirah artificial archipelago, is to double the size of its Dragon Mart retail complex, which became the world’s biggest Chinese trading hub outside mainland China when it was first launched in 2014.
The government-owned developer plans to expand the current 4,000-shop retail complex into a community named Dragon City by adding an extra 6.5 million square feet of shops, residential housing and hotels, increasing the total gross floor area to 11 million square feet.
The expansion comes after the successful launch of the Dragon Mart phase one development which opened in 2014, and phase two of the development which opened in November last year.
“Today, Dragon Mart is the world’s biggest Chinese trading hub outside mainland China with more than 5,000 Chinese businessmen operating there,” said chief executive Sanjay Manchanda, who declined to disclose the total investment cost.
There are more than 4,000 shops, restaurants and entertainment outlets handling an average of 80,000 visitors daily, he said.
In view of the strong demand for retail space at Dragon Mart phase one and two, which was built in the shape of a Dragon to appeal to Chinese investors, Manchanda said businesses were keen to lease the new retail space.
According to the proposed expansion plan, the developer will add an extra 1.3 million square feet of showroom-style retail units, with sizes from 500 square feet to 10,000 square feet, as part of Dragon Mart phase three to phase six. The annual rental cost is from as low as US$75 per square foot.
Located on Hatta Oman Road and easily accessible from Sheikh Mohammed bin Zayed Road, the entire development will comprise 5,700 stores when completed.
Besides retail, Dragon City will include two residential towers housing 1,120 apartments and two 250-room hotels, plus 12,000 car parking spaces. The whole project is due for completion in three to five years.
The developer participated in a three-day Dubai property exhibition last month to woo Hong Kong investors amid a slump in Dubai home prices which have declined for five consecutive quarters.
But Manchanda rejected suggestions that home prices would undergo a downward adjustment due to an increasing supply of flats. For the latest launch of its 960-unit residential tower Warsan Village, 70 per cent of the units were snapped up by Chinese investors, according to Manchanda.
Currently under construction, Warsan Village is located on a 47.5 hectare site about three kilometres from the recently expanded Dragon Mart retail hub. Each town house covers 2,000 square feet and comes with a maid’s room, three bathrooms, powder room, two balconies, private garden and parking for two cars. Prices start at around HK$3.7 million.
Industry consultants Cluttons said in a report that Dubai home prices had recovered to near peak values in 2014 after falling by about half from 2008 highs.
Cluttons is predicting residential prices will fall 3 to 5 per cent over the following 12 months because of a faltering global economy and an increasing supply of residential units.
“We have even seen some Chinese buying plots of land near Dragon Mart and they plan to build homes for renters who are doing business there,” said Manchanda.
In C-Suite on P3, Manchanda talks more about the property investment market in Dubai