Emaar Plans $11B Jeddah Scheme

The new scheme, called Jeddah Hills, will be a partnership with Saudi Al-Oula Development and comprise 20,000 residential units built on 6,835 acres.Emaar chairman Mohammed al-Abbar, announcing the joint venture, stated that, "There is more to come from Emaar and plenty more for would-be owners and investors to look forward to. Emaar is determined to confirm its position as one of the leading real estate companies in the world."

Record-high energy prices have fueled a real estate-development frenzy across the Gulf Arab states with countries competing to unveil the biggest and boldest projects. The IMF forecasts the oil states will have a current account surplus of $480 billion in 2006, three times that of China.

Some of this, according to the IMF, is going into the US bond market, keeping the American housing bubble afloat, or into the acquisition of global companies. Dubai, in the past year, has bought P&O, Madame Tussaud's, CSX World Terminals, a $1-billion share of DaimlerChrysler, and now a slice of Euronext.

But another sizeable chunk is going into property development. In the past few weeks, the following developments have been announced:

• A $600-million joint venture between Bahrain Bay Development and CapitaLand;
• A $60-billion hotel and airport strategy on the part of the Dubai government;
• The $27-billion King Abdullah Economic City in Saudi Arabia;
• The $28-billion development of Saadiyat Island in Abu Dhabi;
• The $150-billion Silk City in Kuwait; and
• A $130-million industrial hub in Qatar.