January 4, 2010
Posted: 759 GMT
By Simeon Kerr, FT.com
Check out side-by-side comparisons between Burj Dubai and the world's other tallest towers
Dubai (FT) - Dubai will on Monday open the world's largest tower as the city seeks to revitalise its economy after 2009's annus horribilis was capped by a debt crisis and a second $10bn bail-out loan from neighbouring Abu Dhabi.
The government hopes the unveiling of the 160-plus storey structure will pierce the cloud that has lingered over Dubai since it was forced to accept further financial support from the capital of the United Arab Emirates and investors turned their backs on the city, once the darling of international finance.
Sheikh Mohammed bin Rashid al-Maktoum, after navigating the worst crisis in his four years as ruler of Dubai, will lead a day of celebrations to unveil the residential, hotel and office building, which offers views across the Gulf to Iran.
For a city founded on superlatives, the achievement of delivering Burj Dubai's half-mile high tower in six years is triggering a wave of hyperbole that has not been silenced by last month's crisis of confidence over the city's $100bn debt mountain. The official news agency called it "another unique achievement by Dubai to be added to the pages of humanity's modern history".
Shares in Emaar, the tower's developer, rose almost 8 per cent to Dh4.16 on the optimistic sentiment, helping Dubai's bellwether stock recover to pre-crisis levels after plunging to Dh2.56 a month ago.
About 90 per cent of units have been sold in Burj Dubai, which will welcome inhabitants to the Giorgio Armani-designed residencies from February, while the world's first Armani Hotel will open in March.
Prices in the tower - which were the highest in the Dubai property market when the residences went on sale in 2007 - have held up in spite of the 50 per cent crash across the city, including the surrounding developments of Downtown Burj Dubai.
Roy Cherry, analyst with Shuaa Capital in Dubai, said the truth lies somewhere between the two. "It is a fantastic building and a great achievement for Emaar, but Dubai's dreams and challenges remain greater than any one building."
Last month's bail-out loan eased default concerns, but Dubai's reputation as a global financial centre remains tarnished after the sloppy restructuring of Dubai World's $22bn distressed debt pile, a process that will dominate much of the outlook for 2010.
That may be painful for investors who bought into the mirage of the city's ever-ascending spiral, but hope can be found in a more affordable Dubai underpinning the city's allure as a services hub for the affluent Gulf region.
As the region's prospects brighten with the rising oil price, Emaar - which has retained 10 per cent of the tower's units for sale in the coming months - is betting that Dubai's infrastructure, epitomised by Burj Dubai and the newly opened Metro network, will allow it to ride a recovery and shake off its debt woes.
Filed under: Dubai