Contrasting fortunes for Abu Dhabi, Dubai F1 preparations

Preparations for the inaugural Abu Dhabi Grand Prix in November have been 'helped' by the current global credit crunch, it has been claimed - but the same cannot be said for the construction of the new, official F1-X motorsport theme park in neighbouring Dubai.

The capital of the seven United Arab Emirates - the world's fifth-largest oil exporter - is set to welcome Formula 1 for the first time on 1 November, providing the venue for the 2009 season finale with the all-new, state-of-the-art Yas Marina street circuit, which is being built by developer Aldar Properties. Work, it has been confirmed, is progressing apace.

"The global economic meltdown has helped the project," underlined Yas Island project director Steve Worrel, "as more workers and bidders are available now."

That news is in contrast to the recent revelation that F1-X developer Union Properties has halted the construction of Dubai's motorsport-based, $460 million theme park in the wake of the global economic crisis and the drying up of bank liquidity, but F1-X marketing director Penny Fischer is adamant that the business model is a sound one and that the park will open in 2010 as was originally planned.

"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 the coming days or weeks to capitalise on the opportunity," she is quoted as having said by Emirates Business 24/7.

F1-X is being put together by engineers, designers and architects from around the world, with its 13 major bespoke rides and attractions being built in 14 different countries before being shipped over to the Middle East, where they will be spread over some 70 acres (285,000 square metres) and will aim to attract more than a million visitors per year to the emirate.

Emirates Business 24/7 reveals that the multi-billion dollar MotorCity initiative will be split into four principal sections; F1-X Dubai - including a 242-room, four-star Marriott Courtyard Hotel - Dubai Autodrome for motorsport fans and two residential areas, Uptown MotorCity and Green Community MotorCity.

"We are offering F1 fans an immersion into the world of Formula 1, to get close to the sport and its essence, its history, the unique technological aspects that go with it and, of course, a glimpse behind the scenes," stated a Union Properties spokesman.

"Designed by a team of the world's best entertainment and theme park experts, F1-X will bring the world of Formula 1 past, present and future, together with a full-service leisure environment."

International news agency Reuters, however, suggests F1-X may have to be canned altogether should Union Properties - Dubai's third-largest property company - not receive either a government cash injection or an already agreed sum of $680.6 million in non-convertible bonds 'as soon as possible'.

"If I get the bond today then I can open the theme park by the end of this year," admitted Union Properties chief executive Simon Azzam. "Our only short-term challenge is the Formula 1 theme park and financing. Raising financing for that will happen, hopefully, through the bond or through government help.

"If the government gives directly to the real estate sector this will be a critical move, and would help stimulate the sector and help give confidence."

Union Properties' shares have fallen by 5 per cent recently, whilst property and renting prices in Dubai are similarly on the slide following a highly successful six-year building boom, causing real estate values to fall by a quarter since September and $263 billion of UAE projects to be either cancelled or postponed.

Dubai's government has said that it will use its $20 billion sovereign bond programme to support government-linked companies by means of a special fund.

Azzam added that he expected Union Properties to make a profit in the opening quarter of the current financial year, though the company is still counting the cost of a $10.24 million loss in the fourth quarter of 2008.

"2009 will be stronger than 2008 in terms of net profit," he affirmed. "In 2009, we will hand over the majority of our properties. That is when we will start recognising the profit."