Closed liquidity taps pose fears for continued development

Dubai: Concerns about overdoing waterfront development in Dubai as the world suffers a liquidity drought, was an issue highlighted on Sunday at the Urban Waterfront conference.

"With the economy changing over the last couple of months, people are more focused now on how quickly you can get returns. Around the world the cost of capital is increasing and banks are pulling back loans," Kern Lim, vice-president of fin-ance at Las Vegas Sands group, Macau, said.

Lim also said waterfront development in Macau was triggered by similar reasons to those in Dubai, mainly the lack of land.

In Macau there is around $30 billion (Dh110 billion) worth of waterfront development underway and in the pipeline. While exact figures in the UAE aren't available, the value is likely to exceed this.

With waterfront developments specifically, Lim noted, if developers can't retain their holding power in the current economic climate, then waterfront developments will see "a bit of a slowdown", while liquidity unlocks itself.

"But I am confident the market will bounce back, over the next one or two years," Lim added.

One of the biggest challenges facing developers of waterfront today, is that the projects are done "properly", according to Robert Scott, general manager of Palm Deira, master planning and design.

"One of the biggest challenges with doing these projects, is to do it properly. With Palm Deira, we've got 25 years to think about the end result," Scott said.

Some people living and working in Dubai are concerned about environmental consequences while others worry that waterfront development creates elite properties for the jet-set crowd only.