IFA, the listed Kuwaiti developer that bought half of Moreland's Zimbaligolf estate in Ballito, KwaZulu Natal, has been hugely successful withits first big development in Dubai.
The 780-unit Golden Mile on Palm Jumeirah was sold out less than 48hours after its launch on May 4. Sales totalled US$450m (R3,1bn) - a possibleworld record.
The success of Golden Mile demonstrates that Dubai is a world leisuredestination, driven by two little-noticed forces: demand and supply. Thisonce- dusty sheikhdom of pearl divers and traders is experiencing growthon a scale all of its own.
There are now two manmade, palm-shaped archipelagos stretching 5 kmor more into the Arabian Gulf. Then there is The World - islands clusteredto form the world's continents - where you can buy a home or resort in"Cuba", "Madagascar" or the "Western Cape".
And Burj Dubai has the highest office building and the biggest shopping centre in the world - at 870 000 m², the size of 30 soccer fields,eight times the size of Sandton City .
Dubailand will be twice the size of Disney World. Scores of 40-storeyhotels, apartment buildings and office blocks, interspersed by tax-free"cities", are rising from an urban landscape that looks the way the Karoowould after a 20-year drought.
Perhaps only Shanghai is growing faster.
Development started in earnest less than a decade ago, when the sheikhdomlaunched "can do", business-friendly programmes offering the best of everything,from roads and IT to tax breaks.
Dubai has reduced oil from 18%-10% of GDP in eight years. Manufacturingis now the biggest economic sector, at over 10%, and direct foreign investmentaccounts for 3% of GDP.
IFA says its buyers come from around the world, but mainly from Britain,Europe and the Middle East. Some are speculators. Others are attractedby a less-than-rigorous control of currency controls, such as, perhaps,the Russian who bought 50 units at Golden Mile.
But dig deeper and you discover that this demand signifies a geopoliticalshift in capital allocation. Most of the European buyers are Westernised,wealthy individuals originating from the Muslim Middle East or Indian continent.
They are reacting to growing prejudice against them, following the September11 2001 attacks in the US and the subsequent war on terrorism. Says IFAchairman Jassim al Bahaar: "Many people who have lived for years in Westerncountries find themselves increasingly being treated with suspicion anddownright discrimination."
They are selling their beach villas in Palm Springs, Florida, as wellas other investments, and buying in places where they feel more welcome."There is no lack of capital available for Gulf projects," says IFA presidentJames Wilson, who is developing strategic alliances with other organisations.
For instance, Golden Mile is a joint venture between Dubai developmentagency Nakheel and IFA. There are alliances with Kingdom Hotel Investments,a Saudi company which controls the Movenpick, Four Seasons and Fairmonthotel groups.
And that's the supply driver. Middle Eastern businesses are not hamperedby corporate structures. Owners, closely aligned to the state's absoluterulers, have no stakeholders to worry about and can make more daring decisionsbacked by professional management.
Wilson adds: "When we negotiated our Zimbali purchase with Moreland,they had five people working on the deal. I was on my own. I could makeinstant decisions with my chairman."
Says al Bahaar: "We open markets, we don't follow them." And now thatDubai is in hand, IFA is moving into Africa.
Kingdom Hotel Investments has a new development in Chad, where, saysCEO Salayem Zok, it is " getting premium risk-adjusted returns and farhigher margins than in Europe and America".
IFA will soon be announcing a new project in Zanzibar. "But SA remainsour most important market," says al Bahaar.
