May 2, 2008
Almost overnight, the tiny Middle Eastern kingdom of Dubai has transformed from a modest trading port into a glittering Shangri-la—complete with indoor ski hill. Situated at the crossroads of the emerging giant economies—China, India, Russia, the Persian Gulf petro-powers—the city-state draws tourists and foreign investors to its audacious mega-projects, from the world’s largest manmade island to the largest mall. In many ways it has played the role of the saloon in the gold rush: the prospectors might strike it rich or go bust, but everyone needs a place to kick back, part with their (occasionally ill-gotten) gains, and broker the deals of tomorrow. As global wealth shifts from West to East, that place is Dubai: a desert kingdom built on real estate.
Symbolic of Dubai’s global ambitions is the Burj Dubai, the world’s tallest skyscraper, which is being constructed by the real-estate developer Emaar Properties. One-third owned by Dubai’s ruling family, Emaar has enjoyed a rise as meteoric as the Burj’s, becoming one of the world’s top five real-estate developers, with a global property portfolio worth $100 billion. A number of Vancouverites, most of whom emerged from Concord Pacific—including Robert Lee, Blair Hagkull, and Stanley Kwok—are among the senior managers and consultants who helped Emaar build Dubai and market its model to the developing world. The most noteworthy of these locals to emerge from the company that developed the former Expo lands is Robert Booth, Emaar’s slim and fashionably spectacled executive director of global development, who recently returned to Vancouver to open Emaar’s first North American branch.
A Friday morning finds Booth (rather uncharacteristically for someone who travels more than most rock stars) at Emaar Canada’s new office on West Hastings. Born in Montreal and raised in Vancouver, Booth completed his BA in political science and urban studies at SFU and an MA in property development and planning at UBC. Now 40, he divides his time among Vancouver, Dubai, London (where Emaar recently acquired U.K. realtor Hamptons International), L.A. (where Emaar acquired John Laing Homes, the second-largest home builder in the United States), New York (one of 10 locations, including the Burj, where Emaar will build Giorgio Armani hotels), and more exotic locales such as Beirut and Marrakech (where Emaar is building a luxury residential golf complex). “Last year,” he says, “I spent about 600 hours on a plane.”
Handpicked by Emaar’s chairman, Mohamed Ali Alabbar, who visited Canada to scout ideas and staff more than seven years ago, the affable Booth is rather Canadian in his reluctance to broadcast his accomplishments or his status near the pinnacle of power in Dubai. Over the years, as other senior managers have come and gone, he has overseen not only the Burj Dubai but Emaar’s expansion into 18 countries. With operations extending across the Middle East and Indian subcontinent, Emaar is translating the Western idea of the good life for a new generation of consumers under his strategic direction.
As Booth readily admits, Emaar is heading west at a time when the B.C. property market is “at the top of the cycle,” with property values rising at clearly unsustainable rates. So why Vancouver? And why now? While Booth speaks of strong market fundamentals and the quarter-million immigrants a year who tend to settle in either Vancouver or Toronto, the more obvious reason may be that Emaar simply wants a foothold in Canada should the bottom fall out of Dubai. More to the point, developers as in-demand as Booth, particularly those who, like him, have young families, may have a longing for home.
“He could be in a hut on a beach in Sri Lanka,” says Robert Fung, Booth’s onetime Concord Pacific colleague. “He still has to run around the globe.” Fung, president of Vancouver development company the Salient Group, says Booth “was the smartest guy to come out of Concord Pacific.” As others who prefer to remain unnamed speculate, someone that smart knows he can work from anywhere. And Emaar knows what it has to do to keep him.
Vancouver is the kind of place, says Booth, that has more to offer than real-estate opportunities. “If you can take some of the big ideas that come out of this place and export them internationally and contextualize them to a region, that’s a plus.” It’s no coincidence, then, that Dubai Marina, an Emaar mega-project that lays claim to being the world’s biggest manmade marina, bears an uncanny resemblance to Concord Pacific’s False Creek development. As architecture critic and Globe and Mail columnist Trevor Boddy has observed, Dubai Marina is “almost a perfect clone of downtown Vancouver—right down to the handrails on the seawall, the skinny condo towers on townhouse bases, all around a 100-per-cent artificial, full-scale version of False Creek filled with seawater from the Persian Gulf.”
Similarities between Dubai and Vancouver don’t end there. Like Dubai, Vancouver is a multicultural, tourist-oriented port city run on human capital in the absence of a significant industrial base. More significantly, both rely on an increasingly speculative real-estate boom sustained by foreign investors. And even as their housing bubbles expand, forcing out the middle class, neither Vancouver nor Dubai has yet seen them burst.
Not so stateside. Emaar’s decision to purchase John Laing Homes for more than a billion dollars in 2006 was poorly timed, coming just as the U.S. housing market was about to embark on its long emergency. The subprime-mortgage crisis created by too much easy credit has rippled around the world, causing Emaar MGF Land, the company’s joint venture in India, to withdraw its IPO in February, citing fears of a U.S. recession and a global financial “meltdown.”
Vancouver’s long-running euphoria was dented earlier this year when a downtown high-rise development did not proceed after selling out at presale. Reports have emerged that insiders had allegedly purchased units at well below market value. “It’s like Stanley Park in the wind—the first big tree has fallen,” says Boddy. “If interest rates go up, a recession hits and other trees will fall. It won’t drop a lot, maybe 10 percent, but any drop will whack the speculators,” who constitute up to half of those investing in Vancouver’s Burj Dubai–high condo market.
Thus far, Emaar appears to be proceeding with uncharacteristic caution, which may be why Booth seems unperturbed. Gazing out his boardroom window at Coal Harbour, he uses the view to illustrate how “the early days of 100 acres of waterfront land sitting empty are gone.” He compares Vancouver’s market to that of London or New York. Emaar Canada, he explains, is developing a residential tower in Victoria and a townhouse complex in South Surrey, and has acquired property at 41st and Balaclava—none of which approaches the scale of King Abdullah Economic City, the $26-billion Emaar project in Saudi Arabia featured in a framed drawing on the wall beside him. Despite that, the Dunbar project has already run into something Emaar doesn’t typically face in Dubai: the wrath of irate citizens. Though the company hasn’t submitted its intentions to city hall, it has shown the community a model of a luxury development, designed by the architect behind the Burj Dubai, that rises to eight storeys. Though marketed as a seniors’ complex, something that might squeeze past zoning regulations, the preliminary development’s proposed height, million-plus per-unit price tag, lack of assisted-living amenities, and designation of age 55 as “senior” have residents calling it a Trojan horse.
Though Vancouver has served as a model for Dubai and lent its talent to build it (and though former city planning czar Larry Beasley, along with his team of other Vancouverites, advises the crown prince of Abu Dhabi, Dubai’s competitive sister emirate), Emaar will find it difficult to sell its more grandiose developments back to Vancouver. Which may, in the end, be why global executives like Robert Booth so enjoy coming home.