Mega Developments

One trend showing up in real estate development in "developing" countries is the "mega development". Some entity with a lot of money decides to build a massive series of buildings and infrastructure. Keep in mind that describing these developments as "recent" is a bit of a misnomer, since these projects take years to decades to complete...

Dubai - This small section of United Arab Emirates was the first out of the gates near as I can tell. Their solution to having nearly filled up all their coastline and beach land is to create coast. Palm Jumeirah, Palm Deira, The World, and other projects are being built on man-made islands. The process creates a significant amount of both buildable land and coastline. Some of this is being done with walk-ability and mass transit in mind, while other parts are more similar to the suburban-style islands off the coast of Miami. Check out Nakheel Development for more. Funds for this project are directly from the Dubai government.

Abu Dhabi - This larger portion of UAE holds nearly 10% of the world's oil reserve. This means they have access to a lot of funds. About $500 billion (with a "B") is being put into development in their coastal capital city, also called Abu Dhabi. (Start Spreading the News! Abu Dhabi, Abu Dhabi!) Ironically, the area being targeted is also about the size of Manhattan. The architecture looks to be superb, while the overall effect appears to me to have the feel of Orlando mixed with Beverly Hills (read: playground of the ultra-mega-rich). It even includes a Ferrari-themed amusement park. This project is also solely government-funded, and developed by Aldar Properties.

Macao - This is actually two islands off the coast of China, and the project is the development of reclaimed land known as the Cotai Strip. Besides being geographically distant from the other two areas, the "project" is a departure from the Middle East projects above in other ways as well. First, the feel of the project is much more Las Vegas than LA or Manhattan. Second, the project is being funded by private development funds from the Las Vegas Sands corporation and MGM Mirage, among others. Sheldon Adelson, of Las Vegas Sands fame, is leading this development effort which is ultimately supposed to produce as much revenue annually as the entire state of Nevada.

Some commonalities exist between these projects. First, two of the three depend largely on reclaimed land. Second, the complexities that exist are quite different from typical developments, and are related to scale and speed of development, as opposed to gaining public buy-in and raising funds.

From a developer's standpoint, these projects represent a dream come true. Put the pedal to the metal and get the job done. They also represent the ability to put forth a particular philosophy or methodology without a whole lot of opposition. Mind you, in these cases, it mostly has to do with play, but the freedom is there. When you think about it, maybe the idea of play contributes to the ease of funding. When "play" sells, the investor can justify the investment economically.

So, the challenge to the developer comes in finding ways to economically justify their development...