Luxury islands developer announces building Heart of Europe, a cluster of luxury homes on six islands off the coast of Dubai, will be ready when the city hosts the World Expo in 2020, but concern remains about oversupply and falling prices in the local property market.
Resembling European destinations like Germany, Venice, Sweden, Switzerland and St. Petersburg, the project is part of The World, 300 man-made islands shaped like a map of the world.
This World project costs $20 million to $50 million for each island, and it captured global attention when it was completed in 2008, at the height of Dubai’s property boom. Now, it’s a symbol of excess as the emirate grapples with a sluggish market.
Kleindienst Group is turning the Heart of Europe islands into an holiday destination with a European feel. Climate- controlled streets promise rain and a snow plaza four kilometres (2.4 miles) off the coast of the desert city.
It aims to complete the project by the time Dubai hosts Expo 2020, a world fair that Dubai hopes will attract 25 million visitors.
Josef Kleindienst, chairman of the privately-owned Kleindienst said that the development has sold 1,000 out of 4,000 units, with villas and palaces priced from $16 million to $100 million each. The whole project is valued at $5 billion.
But property prices in the emirate may decline 10 to 15% over the next two years, S&P Global Ratings said earlier this year. Analysts say excess supply is one reasons, as developers rush to complete projects in time for the Expo.