Bahrain bank exits investment on Dubai’s The World

Shutterstock/Mike Fuchslocher

• The World is 300 manmade islands
• VCBank sold 900,000 sq ft plot
• Sale of Turkey island failed

A Bahrain bank has sold its investment in a manmade island on The World development off the coast of Dubai.

Venture Capital Bank (VCBank), an Islamic wholesale bank licensed by the Central Bank of Bahrain, announced this week that it has sold a 900,000 square foot island plot on The World, which it owned along with partners.

Made up of 300 small manmade islands, The World was conceived as a luxurious private development in the shape of the map of the world that would feature tourist destinations and secluded homes for the ultra-wealthy.

It was launched in 2003 by state-owned master developer Nakheel.

• Dubai businessman ready to take on The World
• Palm Jumeirah’s $52m plot to house high-end residences
• Dubai lures UK travel firm as Saudi rivalry intensifies

“The bank is pleased to announce the successful exit for investors from this unique investment following the boom in the UAE real estate market despite the challenges that the project experienced since its inception,” Sheikh Mohamed Duaij Khalifa Alkhalifa, chairman of VCBank, said in a statement.

The bank declined to comment on the reason for the sale and whether it had profited from the investment.

AGBI reported last month that Turkey island on The World had been put up for auction, with the price tag starting at AED78 million ($21.24 million).

The auction period on the Emirates Auction website where it was listed was extended when the island received no bidders.

A property agent, who declined to be named, confirmed to AGBI that the island is still available for sale even though it is no longer listed on the auction site.

Andrew Love, partner and head of Middle East capital markets at real estate consultant Knight Frank, said he expected to see an increase in appetite for islands at the project.

“With beachfront villas in limited supply and prices at all-time highs, you may start to see a resurgence in interest with high-net-worth individuals building out private homes on their own islands versus paying AED10,000 per square foot for a villa on the Palm,” he said.

Dubai businessman Vinayak Mahtani is also in talks to try and launch a project on The World.

The CEO of holiday home company Bnbme said he began speaking with developer Nakheel in 2019 to build a destination on one of the islands. Discussions fell through in the wake of the pandemic.

Knight Frank’s Love warned that the lack of critical infrastructure and amenities has impeded the islands’ appeal to investors and developers so far.

“Unfortunately, many of the island owners bought in the last cycle where prices were very high. Even in today’s buoyant market, plot prices for World Islands are still well below 2008 original sale prices.”

However, Mahtani said the “empty canvas” element of the project was also one of its key attractions. 

“That’s the beauty of it – a raw island to build what you want,” he said.

Some projects have already got off the ground, among them a hospitality destination launched on Lebanon island, and the Heart of Europe, a large scheme being developed by the Kleindienst Group across six islands.