The coming together of two pioneers in global real estate: The Trump Organization and Dubai’s Nakheel

Nadine Hawa for CNBC, July 2008

Everyone wants a piece of what has been dubbed the 8th wonder of the world: Dubai’s man-made island The Palm Jumeirah; and real estate tycoon Donald Trump is no different.

The Palm Jumeirah is Nakheel’s flagship development. The government owned Real Estate Company is one of the world’s largest developers, and is quickly becoming a major global player in the travel and tourism industry.

The Palm Jumeirah showcases a mixed development of commercial, residential, and world class hotels. At the top of the list: The Trump International Hotel and Towers.

The 62 storey, 300 meters into-the-sky towers, will be made up of two freestanding towers that straddle the central trunk of the Palm, making it the gateway to the heart of the development. It will be the tallest structure on the island, and will be built by the same builders of Dubai’s landmark seven stars Burj Al Arab Hotel.

This represents Trump’s first venture into the Middle East’s real estate sector. When CNBC asked the guru why he had chosen Dubai as a location for his first investment, he said “Dubai is a special place. It is esteemed all over the world. The phenomenal architecture of the building and our partnership with Nakheel will make it very special and very successful. Plus, we have this incredible location on The Palm. I think this is going to be a development the likes of which the world has never seen.”

On the other hand, CNBC also asked Nakheel’s CEO, Chris O’Donnell, about the added value his company was acquiring by teaming up with the Trump name, to which the chief executive answered that one of the things they’ve found in the past couple of years is that branded product is well sought in the middle east, and the Trump name is well respected here.

CNCB also asked O’Donnell if Dubai’s property market was overvalued: “Dubai is positioning itself as the center piece of the Middle East; this city has first mover advantage. If you compare Dubai’s real estate prices versus other hubs around the world such as Singapore, Dubai is still undervalued in my opinion. I think there is still room to move, especially for the right locations (…) so anything based around water or transport hubs. I think you’ll see the pricing continue to grow significantly.”

This project clearly represents the coming together of two leading international companies: UAE’s Nakheel and the US’s Trump Organization.

But they are not the only ones dancing tango to the boom tune which can be heard resonating all over the Emirate.

Another leading example is real estate giant Emaar Properties, which is teaming up with world renowned fashion designer Giorgio Armani. Furthermore, the Emaar Armani hotel will be located in one of Dubai’s other pioneering projects: The Burj Dubai, the world’s tallest structure.

One thing these two competing developments have in common is that they are synonymous with the most expensive real estate in Dubai.  The Trump International Hotel and Towers and the Burj Dubai are both going for between $3000 and $4000 a square foot.

Launched in 2001, The Palm Jumeirah may have started it all, but today it doesn’t stand alone. The years that followed saw the creation of two other Palm Islands: The Palm Jebel Ali, and The Palm Deira.

The Palm Jumeirah, which spearheads the Palm Trilogy with its high end attractions such as the Trump International Hotel and Tower, the Atlantis resort, as well as  entertainment empire Cirque du Soleil, leaves one wondering what the two other palm islands, Jebel Ali and Deira, will offer in order to keep their heads above water and  remain on par.