Dubai’s Roads and Transport Authority (RTA) has issued pre-qualification documents to companies looking to develop the five-tower Union Oasis project above the Union Square metro station.
The call for bidders to register for the project kick-starts what will be the first scheme to be completed under Dubai’s new public-private partnership regime, which is set to take effect on November 19.
Under the Union Oasis project, the five mixed-use towers will be built on a site above one of Dubai’s busiest metro station. Last year, about 9 million passengers used the station, which is one of the main interchanges for the Green and Red lines.
The towers will occupy 14,662 square metres of a total plot size of 37,885 sq metres.
They will be connected at podium level and can consist of four basements, a ground and mezzanine level, and up to 20 storeys above ground. They can include a mix of commercial, office, residential, retail and hospitality space.
An information memorandum sent to developers in August said the site had been dedicated to the metro’s construction in recent years, but its temporary loss “has left the surrounding districts … unconnected and unsupported”.
It said Deira “has the potential to be known as the original downtown” of Dubai. As a result, any proposed scheme had to be “exceptional” and reflect the area’s heritage.
The memorandum also highlighted the attractiveness of the terms for developers, who would lease the site for a 30-year period (excluding the three years it will take to build).
They are not required to make an upfront contribution for land acquisition, they can take partial rent holidays in line with occupancy levels during the first seven years of operation, and they will be offered flexibility over the mix of uses.
A source close to the project said the RTA was inviting interested bidders for one-to-one meetings with its project team to discuss the features and commercial aspects of the project.
“The RTA is open for suggestions and structures that developers think will improve the commerciality of the project,” said the source.
“What the RTA is trying to do is to make the project more collaborative, rather than just setting up the structure and presenting it to the market.”
Developers looking to participate need to register their interest by December 3. The RTA will then issue the tenders with a bidding deadline for next April. The successful bidder, or bidders, will be selected by the end of next May.
The public-private partnership being adopted for Union Oasis is expected to be the first in a series of projects that will tap private sources of finance for infrastructure improvements.
On Monday at the Mena Rail and Metro Summit, Shahrin bin Abdol Salam, the RTA’s chief engineer for rail operations, said that consortia bidding to extend the metro’s Red Line to the site of Expo 2020 could form public-private partnerships to bid for the work, but said this was “not mandatory”.
Bids for this project are due to be submitted in December, and a contract could be awarded by January.
Trevor Butcher, head of Middle East projects and finance at the law firm DLA Piper, argued that Dubai’s adoption of public-private partnerships had been under consideration for years and “isn’t solely oil price-driven”.
“I think there’s a genuine willingness to engage on a deeper level with the private sector,” he said.
The RTA is being advised on the Union Oasis project by Faithful and Gould, a building consultancy, Ernst and Young, a professional services firm, and Trowers and Hamlins, a law firm.
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