4 Intense Days in CDMX

The Mexico City (CDMX) portion of our trip was intense and a great combination of company visits, site tours and cultural activities.

The first meeting that we had was with Metrobuildings, a local multifamily company that is one of the pioneers in the industry in Latin America. One of the founders, Francisco Andragnes (CBS Alum), walked us through the macro aspects of the industry and gave us a very informative site tour of one of his new projects in the Polanco neighborhood. We learned about what is driving the multifamily industry in Mexico and also about every small detail about the design of the apartments.

Multifamily development site – Metrobuildings

Another amazing meeting was with CBRE Mexico. There we had a great presentation made by Lyman Daniels, Mexico’s Country Manager, where he went through the Office, Retail, Hospitality and Housing industries in detail.

CBRE Real Estate Outlook presentation

In a similar tone, we visited Morgan Stanley, and were able to go through a deep macro and market analysis, with a special focus on FIBRAS (the Mexican equivalent of REITS). We had deep discussion over regulation and the outlook of the real estate market in Mexico. We also discussed the current political shifts with the election of the new Mexican president (AMLO) and the effects of the Trump’s election on the NAFTA agreements.

Both CBRE and Morgan Stanley presentations were extremely useful for all of use to gain a better understanding of the markets and a better base to approach the other company visits.

Morgan Stanley Real Estate Division

Another interesting presentation was the one with O’Donnell, industrial developer in Mexico. David O’Donnell, founder and CEO, invited us for lunch at Club the industriales (business club) were we heard his perspective on the world’s industrial development and how Mexico has great conditions for this specific market. He also gave us some professional advice, and after lunch we walked through the Club and were able to see some paintings from Diego Rivera and Frida Kahlo.

Club de Industriales – Business Club (O’Donnell meeting)

The trip has been great so far and all the information and knowledge that we are absorbing is coming together. It has been challenging to be able to stay concentrated but all meeting have been very interesting and have kept all of un engaged.

Valentina Pardo CBS’19

The Disney-like Development of Dubai

Contrary to popular belief, the Emirate of Dubai doesn’t have much oil and it never has. Its leaders recognized early on that it would need to grow other sectors to develop economically, and turned to trade, aviation, tourism, and finance. The Sheik of Dubai set aggressive targets for tourism, and real estate developer Nakheel, one of the most fascinating companies that we met with this week, responded with a creative solution. To create more tourist attractions, beaches, and waterfront property, Dubai would need a longer coastline. The Emirate of Dubai only had 70 kilometers of coastline, and it was already nearly entirely built up.

Nakheel is the company responsible for literally reshaping the map of Dubai through the development of the reclaimed land Jumeira Palm Island (and the new reclaimed land Jebel Ali Palm Island) as well as the World, the archipelago of man-made islands off Dubai’s coast. During our fascinating visit Wednesday morning, we learned about the company’s unprecedented development projects and toured the original Palm Island by boat. We learned that the palm tree shape was chosen because of its local significance, beating out a falcon and an old boat, as well as for the tremendous surface length that would double Dubai’s coastline, adding 70 kilometers of beachfront real estate. We watched a handful of videos about the civil engineering that went into creating the Palm, from projecting sand in a “rainbow” shape from nearby parts of the ocean floor, to vibrating the new sand masses to speed up the compression of particles closer together. Nakheel even transplanted coral that was located closer to the Dubai Port and was in the path of larger ships to its newly created barrier islands.

IMG_3596.JPG

Put simply, this was a fascinating visit. But it also raised a tremendous amount of questions. Nakheel doesn’t share information about the costs or profitability of the Palm Islands development. The company’s prepared response about the environmental sustainability is a bit unsatisfying, reporting that the islands could survive a half meter change in sea level and that the region doesn’t suffer from hurricanes or tsunamis. And Nakheel doesn’t share a timeline for the development of its latest reclaimed land mass Palm Jebel Ali, which is twice the size of Palm Jumeira.

Following the boat tour of Palm Jumeira with Nakheel, I visited the island twice to spend time at two different hotels. Some 15 years after the project’s development commenced, there are still portions of the Palm that are yet to be developed. And driving along the outer road that surrounds the palm tree branches one has no choice but to wonder where so many five-star hotel travelers come from. Driving past five-star resort after five-star resort, and as in many other parts of Dubai seeing more construction equipment than people, I really wish there was public information about the occupancy of the hotels or condominium complexes. The supply and demand curves do not seem to meet at a point that will create value any time soon for Nakheel or the Emirate of Dubai.

Zoe Fox ’17

Global Immersion: Economic Development in the UAE