21 April 2009
ABU DHABI - The opening of a 700-store shopping centre on Yas Island has been pushed back by a year, with the developer, Aldar, planning to use the extra time to cut costs by 30 per cent.
Steve Worrell, the director of Yas Island, which will host the Abu Dhabi Formula One Grand Prix in November, said Yas Mall was now expected to open in March 2012.
"The cost has become the driver, as opposed to schedule, and I think that's the big difference," said Mr Worrell. "We're spending a little more time, and maybe some significant time, to drive the best value, to get the lowest price. The whole [economic] condition has changed."
The developers would look at design tweaks such as air conditioning, lighting and finishing to reduce the budget by a third, but would not change the design significantly, he said.
One cost-cutting change to the shopping centre was replacement of the planned wavy roof design with a flatter one, Mr Worrell said.
Aldar was not changing the size of the circular mall or any other elements that would be noticeable to shoppers, he said. "I don't think the consumer will see any difference at all. They wouldn't have been familiar with the detail."
He said there was a lot of pressure to reduce costs to ensure the project would be profitable. "You don't want to build something that will cost more than you would ever expect to recover."
Construction of the shopping centre, which will span 460,000 square metres of leasable space over three floors, was about 10 per cent complete, said Mr Worrell. However, the design of the mall was 98 per cent finished, he said. Officials were in discussions with retailers about leasing units, but talks were still in the early stages.
As part of Abu Dhabi's 2030 plan, the US$40 billion (Dh146.91bn) Yas Island development has been designated as the leisure hub of the capital. It will feature residential areas that will house about 120,000 people. There will also be seven hotels, including the five-star Yas Hotel, which will have about 2,250 rooms. The hotels are scheduled to open just in time for the Formula One grand prix in November.
Yas Mall will be connected to Ferrari World, an indoor and outdoor theme park that will feature a 70-metre "G-force tower", twin roller-coasters that race each other, a go-karting area and an 18-screen theatre. The world's first Ferrari theme park will not be ready by race day, but the red, 200,000 square metre structure housing the park will be in place. Future plans for the island also include a Warner Brothers theme park and a water park.
Mark Morris Jones, the senior director for retail and industrial property in the Middle East and North Africa with CB Richard Ellis, said cutting costs had become a necessary philosophy for most projects worldwide and Abu Dhabi was not exempt.
"You can't isolate yourself from what's happening to the rest of the world and the rest of the region," he said.
While construction projects are pushing ahead in the emirate, and feedback from retailers has indicated that sales have been more resilient in Abu Dhabi than elsewhere, the push for expansion needed to slow down.
"Yes, Abu Dhabi is plodding along and is more recession-proof than others in the world at the moment," said Mr Jones. "But the fact is that we are affected, just like the rest."
By Armina Ligaya © The National 2009
ABU DHABI - The opening of a 700-store shopping centre on Yas Island has been pushed back by a year, with the developer, Aldar, planning to use the extra time to cut costs by 30 per cent.
Steve Worrell, the director of Yas Island, which will host the Abu Dhabi Formula One Grand Prix in November, said Yas Mall was now expected to open in March 2012.
"The cost has become the driver, as opposed to schedule, and I think that's the big difference," said Mr Worrell. "We're spending a little more time, and maybe some significant time, to drive the best value, to get the lowest price. The whole [economic] condition has changed."
The developers would look at design tweaks such as air conditioning, lighting and finishing to reduce the budget by a third, but would not change the design significantly, he said.
One cost-cutting change to the shopping centre was replacement of the planned wavy roof design with a flatter one, Mr Worrell said.
Aldar was not changing the size of the circular mall or any other elements that would be noticeable to shoppers, he said. "I don't think the consumer will see any difference at all. They wouldn't have been familiar with the detail."
He said there was a lot of pressure to reduce costs to ensure the project would be profitable. "You don't want to build something that will cost more than you would ever expect to recover."
Construction of the shopping centre, which will span 460,000 square metres of leasable space over three floors, was about 10 per cent complete, said Mr Worrell. However, the design of the mall was 98 per cent finished, he said. Officials were in discussions with retailers about leasing units, but talks were still in the early stages.
As part of Abu Dhabi's 2030 plan, the US$40 billion (Dh146.91bn) Yas Island development has been designated as the leisure hub of the capital. It will feature residential areas that will house about 120,000 people. There will also be seven hotels, including the five-star Yas Hotel, which will have about 2,250 rooms. The hotels are scheduled to open just in time for the Formula One grand prix in November.
Yas Mall will be connected to Ferrari World, an indoor and outdoor theme park that will feature a 70-metre "G-force tower", twin roller-coasters that race each other, a go-karting area and an 18-screen theatre. The world's first Ferrari theme park will not be ready by race day, but the red, 200,000 square metre structure housing the park will be in place. Future plans for the island also include a Warner Brothers theme park and a water park.
Mark Morris Jones, the senior director for retail and industrial property in the Middle East and North Africa with CB Richard Ellis, said cutting costs had become a necessary philosophy for most projects worldwide and Abu Dhabi was not exempt.
"You can't isolate yourself from what's happening to the rest of the world and the rest of the region," he said.
While construction projects are pushing ahead in the emirate, and feedback from retailers has indicated that sales have been more resilient in Abu Dhabi than elsewhere, the push for expansion needed to slow down.
"Yes, Abu Dhabi is plodding along and is more recession-proof than others in the world at the moment," said Mr Jones. "But the fact is that we are affected, just like the rest."
By Armina Ligaya © The National 2009
