World Islands ‘still a decade away from completion’

• Only three projects completed
• Most of 300 islands are empty
• Threatened by mainland developments

The multi-billion dollar World Islands off the coast of Dubai will not be complete for another decade at least as logistics and costs stymie development, the man behind its biggest project has revealed.

The $14 billion development, originally consisting of 300 man-made islands, was launched by the government-backed property company Nakheel more than 20 years ago in a boom period in Dubai’s real estate sector.

However, it suffered significantly during the financial crash in 2009 and work was temporarily suspended. 

There has been a struggle to maintain interest, and to date only three projects on the island have come to fruition: Lebanon island; an upmarket Anantara resort opened on Argentina island; and The Heart of Europe, a heart-shaped archipelago that features six themed islands – St Petersburg, Sweden, Switzerland, the Floating Venice, Germany and main Europe. 

The Heart of Europe is surrounded by relative emptiness.

“We know from other island owners that they are working on designs but we have not seen other construction commencing yet,” said Josef Kleindienst, CEO of Kleindienst Group, developer of The Heart of Europe in the World Islands archipelago.

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Kleindienst said cost was a big challenge. Construction for his own mega-development on the World Islands cost 30 percent more than it would on the mainland, while he estimated smaller developments could pay a premium of up to 50 percent to build on the islands.

He also blamed the lack of development on a lack of infrastructure. In particular, he pointed to the absence of transportation hubs, which formed part of the original masterplan and are considered crucial to link the islands with the mainland.

“In order for these small islands to function, they need hubs on the mainland and within the World Islands,” he said.

“These are marinas for passenger boats, but also for vessels that can transport construction materials and food and machinery and so on.

“Most of the other island owners don’t want to start the project as long as these hubs are not available. I would assume as long as this is the case, we will see empty islands.”

In July it was announced that Kleindienst Group had sold out the first phase of its AED1 billion ($270 million) Marbella Resort Hotel, Vignette Collection by IHG Hotels.

It is one of 20 hotels planned for the development. In total 15 are under construction. The Monaco Hotel, which is also managed by IHG under its Voco brand, opened earlier this year, while another five are yet to be signed off.

Kleindienst said he wanted to start building works on the remaining five hotels within the next six months, with completion scheduled in 2026. Altogether, the $6 billion project will have 4,000 keys.

As well as the potential increased costs involved, Kleindienst said, Dubai’s growing real estate sector posed another problem for World Islands developers.

Data company Property Finder says the emirate will deliver around 45,000 new residential units in 2024, with a further 50,000 units expected in 2025.

“I think because everyone is so busy with projects on the mainland, these islands still are not in focus,” Kleindienst said.

Nakheel has been contacted by AGBI for comment.