Plans to construct a Formula One theme park as part of a massive motorsport-orientated development in Dubai have been put on hold as the global economic crisis reaches the Middle East.
Developer Union Properties PJSC announced that a decision was taken at board level to suspend the construction and opening of its F1-X theme park project, which was scheduled to launch later this year, citing 'the current financial market and the drying up of liquidity from banks and financial institutions'. Latest plans now suggest that the park will open in 2010, with Union Properties confident that the project will continue to attract financial support.
“The project is founded on a strong business model that withstands recession whilst allowing for the future growth of Dubai," F1-X marketing director Penny Fischer confirmed, "With construction more than 50 per cent complete, the core of international expertise on the ground and operational plans virtually complete, it is hard to believe that a financial partner will not come forward in coming days or weeks to capitalise on the opportunity.”
Having received an exclusive development licence from FOA in 2006, F1-X was billed as the first family entertainment concept of its kind, a theme park with 'something for everyone', including bespoke rides and simulations, F1 team showcases and experiences, and an F1 hall of fame. It was to have been a focal point of the Motorcity development currently under construction around the Dubai Autodrome circuit.
Union Properties borrowed around $680m for the project, but reported as long ago as June 2007 that it would need more loans. Although well advanced, construction has been halted as Union Properties - which backs cars in the Middle East-based Speedcar Series - refocuses on its main business of managing and renting property. The company, which earlier this week announced a twelve per cent growth in net profit, insists that nearby developments, including Index and Limestone House, were due to be completed in 2009 as scheduled.
“[F1-X] was a borderline project when the market was booming,” Real Capital Analytics MD Dan Fasulo told financial publication Bloomberg
, “The world has changed. There is nobody willing to fund these projects anymore.”
Property prices in Dubai have fallen by around 25 per cent since September, and lending in the UAE is slowing as much as in other, more widely-reported, areas of the world.