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Real Madrid-themed UAE island seeks investors

Source : AP
Last Updated: Fri, Mar 30, 2012 05:47 hrs

-KHAIMAH, United Arab Emirates (AP) — The Gulf country that gave the world indoor skiing in the desert, a Ferrari theme park and a half mile-high skyscraper is back at it with plans for an entire resort island based around the brand of one of the world's richest football clubs.

If all goes according to plan, the $1 billion Real Madrid Resort Island should open in January 2015 on a now nearly barren manmade island in the emirate of Ras al-Khaimah, a little more than an hour's drive north of Dubai.

There will be an amusement park and team museum, a 10,000-seat stadium, private beaches and a marina full of yachts. Luxury hotels and residential properties including high-end villas and apartments are part of the plan too.

That is the package being sold to fans and potential investors, who got their first chance to visit the resort site in the sheikdom Thursday. There is little to see on the island so far beyond some street lamps and the concrete shells of previously planned high-rises in progress.

The executive in charge of the island's development company told reporters that it is still working to line up investors, raising questions about financing for the 5.4 million square foot (500,000 square meter) project just a week after it was announced in Madrid.

RAK Marjan Island Football, the project's developer, plans to begin seeking out investors in a "road show" next month, Chief Executive Louis-Armand de Rouge said. It is targeting banks and individual financial backers in both the Middle East and Europe.

He declined to say how much Real Madrid and its local business partner, the government-controlled RAK Investment Authority, are putting into the project, but he insisted money won't be a problem.

"I have no doubt at all," he said when asked whether the project had adequate funding. "The problem is not so much who is going to invest ... because we know that it's going to be invested," he added, without providing specifics.

Ras al-Khaimah sits in the poorer northern part of the United Arab Emirates and has long been overshadowed by glitzier projects in oil-rich Abu Dhabi and the commercial hub of Dubai, home of the indoor ski slope and the Burj Khalifa, the world's tallest tower.

It sees the Real Madrid resort and other tourist projects as a way to kick-start development and generate international interest in the emirate. An arctic-themed maze of water slides and frigid pools known as Ice Land water park opened just down the road from the Real Madrid site a year and a half ago.

For Real Madrid, the project represents a way to generate extra revenue while expanding its brand in the Middle East and possibly beyond, said Andrew Zimbalist, a Smith College professor who studies sports economics.

"Sports teams are generally landlocked. They can't readily sell their product abroad ... so their growth is more confined than that of a normal, say, manufacturing company," he said, adding that deals like this give teams a way to tap into foreign markets.

"I'm not sure that I see much risk in the strategy, other than the standard business risk that the investment might not pay off," Zimbalist said.

The Real Madrid project wouldn't be the first attraction centered on an overseas brand in the Emirates.

The Ferrari World Abu Dhabi theme park opened in the Emirati capital in October 2010 with attractions including the world's fastest roller coaster and a 20-story tower ride designed to mimic the G-forces felt by race car drivers.

Late last year, it acknowledged it was cutting jobs and shortening opening hours. Although the park does not disclose visitor numbers, the changes were widely seen as a response to lower than expected demand.

Other efforts to develop amusement parks in the UAE have struggled too.

Dubai's plans for a vast amusement complex known as Dubailand that promised to be twice the size of Florida's Walt Disney World foundered when the world economy tanked. Planned attractions such as Universal Studios, Six Flags and Legoland parks were never built.

The city-state's own island-building efforts, meanwhile, have had mixed results. Although one in the shape of a palm proved popular with property buyers and hotel developers, several others including an archipelago resembling a map of the world sit largely empty.

Stefan Zwanzger, a German amusement park enthusiast who blogs about the industry and has lived in the Emirates, questioned the viability of the Real Madrid project, likening it to the over-the-top announcements common in the heady boom years in Dubai before the financial downturn.

"When I heard this announcement, I felt like I was back in 2008," he said. "Whenever I see a theme park being announced at that scale, I never believe it 100 percent. There are many steps that have to be taken" before it becomes a reality, he added.




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