The Pearl Qatar

By Shabina S. Khatri

Also see: Qatar Property | Buying Property in Qatar | Qatar Property Links and Resources

The Pearl: A Riviera-style property construction being built on a 4 million square foot man made island lying on the old hunting grounds of the Qatar Pearl Divers, the Pearl-Qatar has been dazzling investors and visitors alike - although, as Shabina Khatri finds out, construction delays have been putting a damper on enthusiasm.

Selling the Pearl | Recession Woes | Quality Concerns | Cosmopolitan Flair | Movie

Selling the Pearl

Now in its fifth year of development – when it should be crossing the finish line – construction of the Pearl-Qatar continues, with no apparent end in sight. But despite repeated delays, the project is keeping up some momentum with the opening of its 2.5km boardwalk, which gives visitors a taste of what's to come.

Since December, tourists and residents alike have been flocking to the Pearl, so named for the former major pearl diving site it sits upon, to enjoy a myriad of car shows, acrobatic performances and rhythmic melodies.

Generating excitement is critical for the $2.5 billion project, built on 985 acres of reclaimed land just outside of Doha. The country's first international real estate venture, the Pearl's top selling points are cosmopolitan comfort and extravagance, mantras repeated over and over by its sales team.

"We are trying really hard to provide a luxurious lifestyle to suit all the needs that everyone is coming across," says Daniela Stolanova, a marketing specialist at the Pearl. "It is the place to be. It definitely is an escape - it could be your everyday escape."

"It is the place to be. It definitely is an escape - it could be your everyday escape."

Investors seem to believe it. In the past two years, prices for real estate at the Pearl have doubled, with the cost of a two-bedroom, 199-square meter apartment in Porto Arabia, for example, now almost $1 million. Business has been brisk with Qatari locals, but also strong among foreign investors who have been attracted by the tax-free, freehold opportunity and the promise of residency visas.

"It's easy selling the Pearl," says Chafic Chalabi, a member of the Pearl's sales team.

The development, once completed, will comprise of 10 distinctly-themed residential districts with villas, apartments and townhouses, luxury hotels, and three marinas that can hold up to 1,000 boats.

But the project, which is owned and managed by the United Development Company (UDC), Qatar's largest private sector shareholding firm, is not without challenges.

Construction delays have pushed the expected completion date back more than three years, from 2009 to 2012. And although the first of its estimated 40,000 residents were supposed to start moving in by late 2007, the island still has no inhabitants.

Recession Woes

The effects of the global economic crisis have also hit home, slowing the tide of money that had been pouring into the project.

"Business is OK. It was better before," Chalabi concedes.

But while the recession has led to a drop in the number of people willing to pay full-price for property on the Pearl, it has also helped create a new and robust resale market.

"The only thing that's making it hard right now is the economy and liquidity – it's a consumer confidence crisis," says Kalifa Al-Misnad, CEO of My Coreo, a Doha-based real estate company that is reselling about 40 Pearl units.

"The only thing that's making it hard right now is the economy and liquidity – it's a consumer confidence crisis."

Of his clientele, Misnad estimates that about half are reselling their property because they need cash now. He says the problem has only been exacerbated for investors who have had to start making mortgage payments on their units, but cannot live in or rent out their properties due to construction delays.

"People are obviously annoyed about the delays, especially because their mortgages have kicked in and they don't have a unit," he says. "The mortgages generally kick off at a certain date which is the date the unit is originally estimated to be handed over, and for a lot of people that was in 2008."

Property prices in some parts of Doha have fallen almost 40 percent, but analysts expect Qatar's gas-rich economy to expand by 10 percent this year - outperforming other GCC countries.

"We still have demand," Chalabi points out, "which is good."

"We're still selling, which is very good. Prices didn't go down, and we're still building. The Pearl – it's doing just fine."

In terms of the resale market, the situation is a "win-win," says Misnad.

"You can get a 20 to 40 percent discount, because there are a lot of people in financial need who are trying to sell it for whatever they can get it for… I can see the property value escalating," he says.

"You've got restaurants, malls, a nice way of living and there's really nothing else like it in Qatar. Why pay rent somewhere else if you can own it?"

Quality Concerns

Some Pearl project employees say they would not invest in the development because they've learned "too many of its secrets".

Speaking anonymously, one engineer said he does not expect the Pearl to meet its completion deadline of 2012, predicting instead that it could take a couple more years as some parts of the project have yet to break ground.

Some Pearl project employees say they would not invest in the development because they've learned "too many of its secrets".

The engineer, who has worked on the Pearl since 2005, added that proper implementation of the site plans has been difficult. The construction workers "need to do their job properly," he said. "You see the drawings but they're not matching them – the conduits for example – because they take the easiest way, or because of electrical headaches, or sometimes not to waste money."

But the recent influx of skilled workers from Dubai, which has fared far worse during the economic recession than Qatar, is expected to help remedy some of the quality problems.

Cosmopolitan Flair

Apart from investment opportunities, the Pearl, which is linked to Doha's mainland by causeway, will offer a safe, family-friendly entertainment venue by day and a hip hangout for the younger crowd by night, Stolanova says.

Aud Sirnes, a 36-year-old Doha resident, is already sold on the idea.

"This is just fantastic," she gushed on a recent visit with her family to the Pearl's boardwalk. "It's very nice to have a place like this to go walking."

Referencing Aker Brygge, a popular shopping district in her native Norway, Sirnes said the Pearl was "a thousand times better."

"I look forward to seeing it when it's finished," she added.

Mohammed Omar Alwy, an employee at one of the many coffee shops dotting the boardwalk, says working at the Pearl gives him a chance to experience cosmopolitan living.

"It's fun here," the 20-year-old, who moved to Doha from Kenya last year, says. "I enjoy to see all the different people."

Though it will be at least a few more months before residents can move into the Pearl, famous names like Armani, Cugini and Hermes have already started to fill up the island's 2 million square meters of retail, leisure and restaurant space.

Movie

Links and Resources

• The Pearl
• My Coreo

Shabina S. Khatri is an American journalist freelancing in Doha, Qatar. She has previously written articles for Al Jazeera English, the Detroit Free Press and the Wall Street Journal. E-mail her at shabina.khatri[at]gmail[dot]com.