Merex Investment, a joint venture between Brookfield Asset Management and Dubai Holding, plans to start redeveloping a section of the city’s waterfront popular with tourists and residents as an influx of expats boosts demand, reported by Bloomberg. Founded in 2019, Merex is finalizing plans for an ultra-luxury development at La Mer North, its chief executive Shahram Shamsai said in an interview.
Construction of about 225 luxury homes in the area, popular with wealthy buyers, is set to begin later this year and be completed by the end of 2027. The project will be located near J1, an entertainment complex developed by Merex that opened in September. Merex is working with Dubai Holding, an investment conglomerate owned by the emirate’s ruler, to create shopping and entertainment districts that serve the residential neighborhoods around them.
Demand for retail space
Demand for retail space in prime locations in Dubai has been robust, with average rents in some of the region’s largest malls up more than 13% per square metre in the fourth quarter compared to a year earlier. Consumer spending in Dubai is benefiting from a steady flow of expats and visitors from around the world. However, that expansion could be hit if the US and other major economies slow sharply.
“There is a huge increase in new residents and tourism is still growing, which generally means retail sales and visitors are growing,” said Shamsai. There is no sign at the moment that tourist or resident spending is slowing, Shamsai said, adding that Merex’s competitors appear to be seeing similar trends. “If you get a major global macro event that leads to a reduction in travel and spending, then obviously we expect some impact,” he added.
La Mer & City Walk
Merex, which draws on Brookfield’s experience in property management, has been tasked with redeveloping parts of the city known as La Mer and City Walk. The company also manages The Beach at JBR, a tourist hotspot. While one part of the City Walk development is complete and includes offices, shops and restaurants, another phase is being developed and is currently under construction, the CEO said. It will include retail, restaurants, co-working spaces and other facilities to serve the growing residential neighborhoods in the area. He declined to comment on the cost of the projects.