The proud owners of Great Britain on Nakheel's iconic 'The World' project are determined to see out the real estate slump, and turn a healthy profit on their $60m investment.
We've all seen the aerial photos, but approaching The World islands aboard a custom speedboat, it is a little harder to pick out the continents. Our sea-level approach does the project few favours, offering no clue that Nakheel's $3bn mega-project constitutes anything more than a maze of islands of differing size and shape.
Fortunately, our captain is equipped with a state of the art GPS system, and wends his way expertly along the west coast of Africa, skirts Europe and slips into the English Channel. Circumnavigating the globe has never been so easy.
Our destination is the island of 'Great Britain', and accompanying me are its proud owners, two men who have staked their futures on its success. For $60m they have bought one of the most expensive sandbanks on the planet - all 11 acres of it.
"It makes a great story, doesn't it? We bought it in the middle of a recession," jokes Safi Qurashi, CEO of private residential development company Premier Real Estate Bureau (Premier).
In reality, the purchase was made before the recession took hold. When the 39-year old London-born property developer and his business partner Mustafa Nagri snapped up the island in May 2008, Dubai's economy was still riding the crest of the real estate boom.
Now, it seems they paid top dollar for an asset that will have plummeted in value in the wake of the global downturn, and in particular the real estate slump that has hit Dubai.
Qurashi, however, sees it differently.
"It was a fairly carefully, well thought-out purchase, rather than just buying it and seeing what happens," insists Qurashi.
"We can understand everyone's sentiments right now because markets are down, but when we did it last year there was always the expectation that the market would cool," he continues. "Perhaps we didn't anticipate the speed with which it would happen, but the percentage drops that we've seen were what we expected."
"All the signs were there [in May] that it was going to be a bumpy ride for the next couple of years," he adds. "But we bought it because we wanted to develop it. It wasn't a speculative buy."
Still, that foresight wasn't enough to prod him into haggling for a lower price tag.
"We went to Hamza Mustafa [managing director of The World] and said ‘these islands are the ones we want to buy, are they available?" recalls Qurashi. "It turned out they were available so we immediately went ahead with it. There was zero negotiation on price."
The World, launched in 2003 by Dubai's Ruler HH Sheikh Mohammed Bin Rashid Al Maktoum, is synonymous with the 'anything is possible' attitude that has shaped the emirate's explosive growth over the last 10 years. Developed by state-owned Nakheel, the project is one of the biggest offshore reclamation projects on the planet.
Premier invests in and develops seafront properties and, according to Qurashi, buying an island on The World represented a natural addition to the firm's extensive onshore portfolio. Nor do they believe that the current climate will jeopardise their project's long-term prospects.
"I don't agree with the amount of cynicism that exists right now in Dubai," says Qurashi, reviewing the current pessimism in the market.
"People have lost a lot of confidence and have become very cautious and with that comes all the doom and gloom. But I don't think Dubai and its success is in question."
"For what we've paid per square foot, I think we've got a good deal," he continues. "It's on a par with land on the shores of Dubai, so to be able to purchase land at similar or even a lower price, and have such a unique development, makes good sense," Qurashi argues.
The slowdown was still some way off when Qurashi and Nagri moved from the UK to Dubai to establish Premier in 2004. Their timing could not have been better; the company registered an astonishing $400m in profits last year, double what it earned in 2007.
The two developed a fascination with The World in the second half of 2007, and in March last year took the plunge, snapping up the 13-acre 'Moscow' island for $58m.
The duo have had their plans approved by Nakheel - which must sign off on the designs for all 300 islands - and work on the Moscow project should begin in earnest within the next eight months, depending on market conditions.
"On Moscow we're looking to build a mixture of retail and residential, so we're in talks with a small boutique Italian hotel operator, and a few retailers including Versace," says Qureshi. "The idea is to have a very exclusive high street with around a dozen boutique shops and very well-known brands on one side, and then a dozen very well-known restaurants on the other."
The location of Moscow - it is relatively central and closely surrounded by 30 to 40 other islands - means that the developers hope to attract visitors from the five-star hotels being built on nearby atolls.
"With Moscow, because of the population density and their love of fashion and food, we wanted to have more of a fun-type environment," says Qureshi. "Great Britain is still in the planning stage, but that's based around a quieter lifestyle, and a very marina-based lifestyle. Personally, I'd probably rather live on Britain, but then visit Moscow for the shopping and the eating."
So far, 175 of the islands - priced between $15m and $250m - have been sold to individual developers, each one required to start construction within five years of buying the plot.
However, although reclamation for the project was finished in early 2008, building work has yet to begin on any of the islands and there have been concerns that the liquidity crunch engulfing the UAE could prevent some developers from securing the finance they need to start construction.
Last month it emerged that some sub-developers who have bought islands on The World had missed instalments and asked Nakheel for help in funding their investments. The master developer is currently in talks with a number of banks to thrash out a solution to the current financing bottleneck.
As is to be expected with such a hefty purchase, Premier's $60m payment for Great Britain is spread over three years, but with one condition: that it is paid in hard cash. Full handover takes place once the subdeveloper has stumped up around 45 percent of the cash, something Premier hopes to have achieved for both islands before the end of 2009, so that construction work, estimated to last four years, may begin in earnest.
In addition, Premier estimates that the Great Britain island will take another $490m to develop if it is to maximise its potential, and with that in mind Qurashi refuses to rule out going to the debt markets next year to finance the project's significant construction costs.
"At the moment it's all financed through Premier, though we are looking now at creating some kind of equity fund for both the islands, to bring in outside investors," Qurashi explains. "We've been approached by a number of potential investors, and the next six months will be about making the right move at the right time."
"We work very closely with the team at The World, and they've been extremely good with us, and quite flexible," he continues. "The support is certainly a lot better than it's ever been, and I think Nakheel has realised that the projects needs to work, so they are supporting their subdevelopers, which perhaps is something they have learned over the years."
On Great Britain, Premier plans to build around 100 luxury villas and apartments, ranging in price from $2m to $6m, and therefore staying within the range of the very rich, not just the super-rich. The island, whose population will barely exceed 500, may also feature a small hotel together with basic amenities such as restaurants and small shops.
Both the owners are keen to own properties on the island, and reveal they may keep back 25 units from which to generate rental income. To discourage speculators - homes are being targeted at people who will actually live in the properties - Qurashi and Nagri insist sales will not begin until building has commenced.
Qurashi explains that Premier is looking at a number of "options" from British designers based both in Dubai and in the UK, and says that he wants the island to reflect the architecture of his native country.
That, as he is quick to add, means giving old designs a modern twist, rather than crossing the line into kitsch with Big Ben replicas or faux-London pubs.
"To me that is tacky. I don't want to put a Buckingham Palace or a Queen Vic pub and a Big Ben [on the island]. We're not replicating Disney," he says.
"The inspiration is coming out of the UK, whether it comes from buildings out of Central London, or the look and feel of somewhere out in Dorset, we want it to be instantly recognisable as the island of Great Britain."
When pushed to name an area in the UK the island might eventually resemble, Qurashi selects the exclusive seaside town of Sandbanks in Dorset. It is an ambitious comparison - Sandbanks is a millionaires' playground, its stunning coastline dotted with homes worth untold millions of dollars.
So what defines British culture?
To start, Qurashi points to Britain's architectural heritage, highlighting City of London skyscrapers Canary Wharf and the Swiss Re building - nicknamed 'The Gherkin' - as two shining examples of modern British architecture.
"To me British culture is to be innovative and to lead, taking something
that already exists and turning it into something very new and wacky, but
knowing where the origins of the design have come from," he explains.
If Qurashi and Nagri have their way, then by the time the first tenants arrive on the island - and provided the ambitious project survives the tight years ahead - it should be far easier to distinguish Great Britain from its neighbours.