Fears grow over Dubai market as projects hit delays

Cracks have started to appear in the Dubai construction market as it emerged several projects by one of the emirate’s biggest developers have been hit by delays.

Three schemes from Dubai Properties, the state-owned firm behind some of the region’s grandest developments, are behind schedule – at least one as a result of market concerns.

The developer said the launch of elements of Culture Village, the £9bn leisure, arts and residential complex that aims to give the region a “heritage zone”, had been delayed owing to concerns about the global financial turmoil.

The scheme, which includes luxury hotels and theme parks, was meant to be unveiled three weeks ago but the developer said it was now hoping to launch the project by Christmas.

Meanwhile, the firm’s Porsche Design Towers – an 85,000m2 office tower and a 30,000m2 residential tower designed by the Office for Metropolitan Architecture and Porsche Design – is understood to be on hold.

It is understood that the handover of the £430m Atkins-designed Executive Towers has been pushed back from the end of this year to a likely date of late 2009.

The news follows recent signs that the Middle East real estate market is beginning to slow.

Earlier this month, estate agent Colliers International said the growth of property prices in Dubai fell to 16% in the second quarter of 2008, down from 42% in the first. The Dubai-based Better Homes property group said the global crisis had “made investors slightly more cautious”.

But others said delays in Dubai were normal and should not be overplayed. Tony O’Neill, director of multidisciplinary consultant Waterman International, said: “Projects stop and start here at the drop of a hat. It’s not comparable to the UK.”

Dubai Properties were unavailable for comment.