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it d o e s n ’t r e p o r t e a r n in g s , b u t a n a ly s ts d o u b t th a t tw o lo n g -h a u l c a r r ie r s c a n p r o fi t in s u c h c lo s e p r o x im ity .“ T h e id e a th a t ju s t a n y o n e c a n p u t a s tic k in th e g r o u n d a n d w a tc h it g r o w in to a tr e e is lu d ic r o u s ,” s a y s R ic h a r d A b o u la fi a , a n a v ia tio n a n a ly s t a t T e a l G r o u p .“ T h e r e r e a lly is n ’t e n o u g h tr a ffi c , n o t to m e n tio n th a t th e E u r o p e a n a n d A s ia n c a r r ie r s a r e s ta r tin g to fi g h t b a c k .” B u t if th e a ir lin e ’s g o a l is to p u t A b u D h a b i o n th e m a p , it’s s ta r tin g to s u c c e e d — it c a r r ie d th r e e m illio n p a s s e n g e r s la s t y e a r, m o r e th a n tw ic e th e n u m b e r in 2 0 0 5 . T h e n e x t th in g A b u D h a b i n e e d e d w a s a la n d m a r k .T h e a n - s w e r w a s th e $3 b illio n E m ir a te s P a la c e h o te l, w ith its $1 ,0 0 0 - a -n ig h t r o o m s a n d $1 0 ,0 0 0 s u ite s .I t w a s A b u D h a b i’s b id to o u td o D u b a i’s B u r j A l A r a b , th e $1 b illio n s a il-s h a p e d h o te l th a t h a s b e c o m e a to u r is t a ttr a c tio n .T h e p la n w o r k e d : W h ile th e E m ir a te s P a la c e d o e s n ’t s e e m to h a v e m a n y g u e s ts , it d o e s h a v e g a w k in g E u r o p e a n to u r is ts . B u t th e m o s t im p o r ta n t c h a n g e w a s L a w N o .1 9 .I t fo r m a lly a b a n d o n e d th e o ld p r o p e r ty r e g im e a n d p e r m itte d th e s a le o f la n d b y c itiz e n s a n d , in s o m e a r e a s , th e p u r c h a s e o f 9 9 - y e a r le a s e h o ld s b y fo r e ig n e r s .T h e r e a l e s ta te b o o m s ta r te d im m e d ia te ly .“ M a n y p e o p le h e r e h a d b e e n in v e s tin g h e a v ily in D u b a i,” s a y s A h m e d A li a l S a y e g h , w h o fo u n d e d A b u D h a b i’s fi r s t p r iv a te - p r o p e r ty d e v e lo p m e n t c o m p a n y , A ld a r P r o p e r tie s .“ T h is w a s th e fi r s t tim e th e y c o u ld d o s o m e th in g in th e ir o w n c ity .” Saadiyat Island Al Reem Island “In Abu Dhabi,” says architect Frank Gehry, “you can do things that would be anywhere else.” W h e n h e to o k A ld a r p u b lic in 2 0 0 5 , it w a s o v e r s u b s c r ib e d m o r e th a n 4 5 0 tim e s .P e o p le w a ite d in lin e o v e r n ig h t to b u y v illa s in A l R a h a G a r d e n s , A ld a r ’s fi r s t p r o je c t.T h e $4 0 0 ,0 0 0 u n its s o ld o u t in 4 5 m in u te s . B u t a s m u c h a s A ld a r w a s m o d e le d a fte r E m a a r P r o p e r tie s , th e d e v e lo p m e n t c o m p a n y th a t b u ilt m u c h o f D u b a i, th e r e w a s n ’t a r u s h to s im p ly c o p y w h a t D u b a i d id .A fte r a ll, b e n e a th th a t c ity ’s g litte r a r e s e r io u s p r o b le m s n o o n e lik e s to ta lk a b o u t.Its in fr a s tr u c tu r e is o v e r ta x e d , in fl a tio n is c lim b in g , a n d c r im e a n d p r o s titu tio n a r e o n th e r is e .A b u D h a b i h a s a m o r e tr a d itio n a l a n d m o r e r e lig io u s p o p u la tio n , u n w illin g to s a c r ifi c e its w a y o f life fo r to u r is t d o lla r s . T h a t’s w h y it is b u ild in g th e w o r ld ’s s e c o n d -la r g e s t m o s q u e . T h a t’s w h y th e E m ir a te s P a la c e lo o k s r ig h t o u t o f The Arabian Nights.T h a t’s w h y th e c ity ’s p la n n e d C e n tr a l M a rk e t h a s a s o u k . It’s e v e n e v id e n t in th e a d v e r tis in g .I n D u b a i, p r o p e r ty a d s fe a - tu r e p ic tu r e s o f s m ilin g , w in e -d r in k in g W e s te r n e r s fr o lic k in g o n th e b e a c h e s .I n A b u D h a b i th e y te n d to s h o w A r a b fa m ilie s in tr a d itio n a l d r e s s .“ W e d o n ’t s e e k to b e c o m e a c o m m o d itiz e d d e s tin a tio n fo r m a s s to u r is m ,” s a y s S h e ik h S u lta n b in T a h n o o n a l N a h y a n , c h a ir m a n o f th e n e w A b u D h a b i T o u r is m A u th o r ity . “ W e ’r e c r e a tin g a n e x c lu s iv e , h ig h -e n d to u r is t d e s tin a tio n .” P e r h a p s th e b e s t e x a m p le o f th a t is S a a d iy a t I s la n d , a $3 0 b illio n p r o je c t th a t in c lu d e s 2 9 h o te ls , th r e e m a r in a s , tw o g o lf c o u r s e s , a n d h o u s in g fo r 1 5 0 ,0 0 0 p e o p le .B u t w h a t m a k e s it d iffe r e n t fr o m D u b a i is th e a tte m p t to c r e a te a c u ltu r a l o a s is in th e d e s e r t.“ W h e n w e w e r e d e s ig n in g it, w e th o u g h t th e r e h a d to b e s o m e o f w h a t w e c a ll ‘p e a r ls ,’ ” s a y s J o s e S ir e r a , a n a r c h ite c t w ith G e n s le r, a S a n F r a n c is c o fi r m th a t d e s ig n e d th e m a s te r p la n fo r th e is la n d .“ It n e e d e d a r t g a lle r ie s o r m u s e u m s o r s p e c ia l g a th e r in g p la c e s .” S o o n th e c r o w n p r in c e w a s m e e tin g w ith T h o m a s K r e n s , th e d ir e c to r o f th e G u g g e n h e im M u s e u m in N e w Y o r k C ity . “ H e s a id h e w a n te d a c u ltu r a l d e s tin a tio n th a t e v e r y b o d y in th e s o p h is tic a te d w o r ld o f a r t a n d c u ltu r e w o u ld h a v e to v is it,” K r e n s s a y s .“ S o I s a id , ‘L e t’s ta k e w h a t’s w o r k e d a r o u n d th e w o r ld a n d m a g n ify it b y 5 0 %.’ ” T h e r e s u lt: a 6 7 0 -a c r e c u ltu r a l d is tr ic t d e s ig n e d b y s o m e o f th e w o r ld ’s b e s t-k n o w n a r c h ite c ts , in c lu d in g Z a h a H a d id , J e a n N o u v e l, T a d a o A n d o , a n d — a t th e s p e c ia l r e q u e s t o f th e c r o w n p r in c e — F r a n k G e h r y , w h o w ill tr y to o u td o w h a t h e d id fo r th e G u g g e n h e im in B ilb a o , S p a in .F o r g o o d m e a s u r e , A b u D h a b i o ffe r e d a r e p o r te d $1 b illio n fo r a n o u tp o s t o f th e L o u v r e , th e P a r is m u s e u m ’s fi r s t.T h e e n tir e p la n is e s tim a te d to c o s t b illio n s .“ I n e v e r e x p e c te d to b e a b le to d e s ig n a n o th e r o n e o f th e s e p la c e s ,” G e h r y s a y s .“ B u t in A b u D h a b i y o u c a n d o th in g s th a t w o u ld b e u n th in k a b le a n y w h e r e e ls e .” A ll th a t h ig h b r o w in te n tio n d o e s n ’t m e a n A b u D h a b i h a s n ’t b o r r o w e d s o m e D u b a i-lik e id e a s .Y a s I s la n d w ill h a v e a F e r r a r i th e m e p a rk a n d d r iv in g s c h o o l (A b u D h a b i o w n s 5 % o f F e r r a r i th r o u g h M u b a d a la ), a r a c e tr a c k w in d in g its w a y a r o u n d th e is la n d , w a te r p a r k s , a d o z e n h o te ls , fo u r p o lo fi e ld s , a g o lf c o u r s e , a n d a F o r m u la O n e r a c in g te a m .T h e D a n e t A b u D h a b i d e v e lo p m e n t w ill fe a tu r e 3 6 m ix e d -u s e to w e r s , tw o s h o p p in g m a lls , tw o m o s q u e s , a n d a fi v e -s ta r h o te l.O n A l R e e m I s la n d , S h a m s A b u D h a b i w ill h a v e a c a n a l s y ste m F E E D B A C K bgimbel@fortunemail.com M a r c h 1 9 , 2 0 0 7 F O R T U N E • 1 7 5
lik e V e n ic e ’s , a c e n tr a l p a rk lik e N e w Y o rk C ity ’s , a n d a n 8 3 -s to r y s k y s c r a p e r. S O , I F T H E Y B U I L D I T , w ill th e y c o m e C e r ta in ly s o m e o f th e r e s id e n tia l p r o je c ts w ill s e ll, b e c a u s e A b u D h a b i fa c e s a h o u s in g s h o r ta g e a n d r e n ts th a t a r e in c r e a s in g a lm o s t 5 0 % a y e a r.(A th r e e -b e d r o o m a p a r tm e n t is a s e x p e n s iv e a s in M a n h a tta n .) O th e r p r o je c ts m a y n e v e r g e t o ff th e g r o u n d . B u t D a v id s o n , th e U A E e x p e r t, th in k s A b u D h a b i h a s a b e tte r m o d e l th a n D u b a i’s .“ D u b a i r e lie s to ta lly o n c o m m e r c e a n d to u r is m , s o if th e r e w e r e a w a r, in s ta b ility , o r te r r o r is m , D u b a i is fi n is h e d ,” h e s a y s .“A b u D h a b i’s b r a n d o f to u r is m w o u ld b e a b le to b o u n c e b a c k .It’s n o t r e ly in g o n E u r o p e a n s w h o c o u ld c h a n g e th e ir fa v o r ite d e s tin a tio n o n a w h im .A b u D h a b i is g o in g a fte r A r a b to u r is m a n d in v e s tm e n t.” S till, A b u D h a b i fa c e s s o m e o f th e s a m e p r o p e r ty -b u b b le d a n g e r s a s its n e ig h b o r to th e n o r th .W h ile m u c h o f D u b a i h a s b e e n p u r c h a s e d b y r e a l e s ta te fl ip p e r s , th e c ity h a s b e - c o m e a le g itim a te b u s in e s s c a p ita l, w ith th o u s a n d s o f e x p a tr ia te s m o v in g in e a c h m o n th .I t’s g o in g to b e d iffi c u lt fo r A b u D h a b i to a ttr a c t th e k in d s a n d q u a n titie s o f m u ltin a tio n a l c o m p a n ie s th a t h a v e s e t u p s h o p o r o p e n e d r e g io n a l h e a d q u a r te r s in D u b a i. T h e fo lk s in A b u D h a b i d o n ’t s e e m to w o r r y a b o u t s u c h th in g s .A fte r a ll, th e y s a y , th e y a r e n o t ju s t d iv e r s ify in g in to r e a l e s ta te a n d to u r is m .M u b a d a la is in v o lv e d 1 7 6 • F O R T U N E M a r c h 1 9 , 2 0 0 7 A $6.8 billion airport expansion includes a runway wide enough to land Etihad Airways’ Airbus A380 jets. “They are smart, and well trained— they could just as well be working at Goldman Sachs.” in d e v e lo p m e n t p r o je c ts a r o u n d th e w o rld , in c lu d in g o il e x p lo r a tio n in L ib y a a n d te le - c o m s y s te m s in N ig e r ia .T h e A b u D h a b i I n v e s tm e n t A u th o r ity , w h ic h S h e ik h Z a - y e d s e t u p to m a n a g e th e e m ir a te ’s o il p r o fi ts in 1 9 7 6 , n o w h a s a n e s tim a te d $1 tr illio n in v e s te d in w o r ld m a r k e ts . T h a t’s w h y A b u D h a b i m a tte r s , s a y s T o m P r itz k e r, c h a ir m a n o f th e G lo b a l H y a tt h o te l c o m p a n y , w h o is c o n s id e r in g s e v e r a l d e a ls in th e e m ir a te .“ T o m o r r o w ’s w o r ld m a y s e e th e U .S .a s th e c e n te r o f in n o v a tio n a n d m ilita r y s tr e n g th , C h in a a s a c e n te r o f p o p u la tio n a n d e c o n o m ic g r o w th , a n d th e M id d le E a s t a s a p r im a r y s o u r c e o f o il a n d c a p ita l,” h e s a y s .“ T h e s e g u y s a r e v e r y im p o r ta n t to o u r g r o w th a n d s ta b ility , b e c a u s e a t th e ir c o r e th e y a r e s im p a tic o to o u r v a lu e s a n d a p p r o a c h to life .T h e y a r e s m a r t, s o p h is tic a te d , a n d w e ll tr a in e d — th e y c o u ld ju s t a s w e ll b e w o r k in g a t G o ld m a n S a c h s o r B la c k s to n e .” K h a ld o o n lik e s to te ll a s to r y a b o u t h o w th e c r o w n p r in c e w o r k s .A b u D h a b i’s o u td a te d s e a p o r t, s itu a te d in a p r im e lo c a tio n , w a s c a u s in g p r o b le m s fo r r e - d e v e lo p m e n t.“ H e s a id , ‘W e ’v e g o t to fi n d a n e w lo c a tio n ,’ ” K h a ld o o n s a y s . “ W ith in 6 0 d a y s , e v e r y o n e c a m e b a c k . A ll th e o p tio n s w e r e p u t o n th e ta b le . H e m a d e h is d e c is io n r ig h t th e r e .B o o m . A n e w lo c a tio n fo r a n e w p o r t a n d th e la n d to g o w ith it.T h in g s lik e th a t ju s t d o n ’t h a p p e n th is q u ic k ly a n y w h e r e e ls e in th e w o r ld .” T h e n a g a in , th e r e ’s D u b a i. F
Page 1 and 2: Ninety miles from Dubai, another Xa
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