Mercedes-branded $1 billion tower is Dubai's latest bet on super rich

By Zainab Fattah

Mercedes-Benz Group AG insignia flashed on screens as thousands of guests thronged a hotel best known for hosting Dubai’s biggest horse-race. The glitzy event marked the unveiling of the city’s latest luxury tower, where some apartments will cost up to $10 million apiece. 
 

The $1 billion development with unobstructed views of the world’s tallest tower, Burj Khalifa, is being built by Binghatti Properties in a first of its kind tie-up with the German automaker. Featuring 150 apartments starting at $2.7 million, the building is another high-stakes bet on Dubai’s property market that’s emerged as one of the world’s hottest over the past few years.

 

The project is the latest in a series of branded developm­ents, a pocket of the market that now makes up a big chunk of all apartment sales in the city. 
 

Last year, Binghatti broke ground on a tie-up with Bugatti Automobiles SAS on a project that will include elevators to transport cars to penthouses. The firm is also partnering with jeweller Jacob & Co on a 500-meter (1,640-feet) tower that’s set to become the world’s tallest residential building.
 

Those high profile projects — and the return of the lavish parties to announce them — are reminiscent of the days leading up to the 2009 crash, which ended a speculative boom built on debt and brought Dubai to the brink of bankruptcy. 
 

While no one has so far predicted a crash, some analysts have forecast less of a boom in 2024. Binghatti isn’t worried about a possible slowdown, and its Chief Executive Officer Mohammad Binghatti expects prices to climb 12 per cent to 18 per cent this year. 
 

To cash in, the builder is set to complete 20,000 homes in 18 months — twice the number of properties it built in the last five years. Binghatti owns a contracting business with 5,000 employees handling everything from engineering to construction, enabling it to build quickly. Most of its projects are completed within 18 months, with luxury developments like the Mercedes-Benz and Bugatti towers set to finish in three years. 
 

The firm has been snapping up land, spending about $330 million in the past three months alone, and is considering raising $500 million from a bond sale to finance projects. 
 

Wealth migration
 

“We’re definitely going to see more growth this year and the following year,” Mohammad Binghatti said in an interview. “There is clear wealth migration coming to Dubai and an increase in the population, which provides room for organic growth in 

the market.”