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November 2008
Marketing
Brand Royalty
In business, culture and sport, Abu Dhabi and Dubai are spending trillions to establish their respective brands — and better each other. Boyd Farrow reports
Adidas, Coca-Cola and Omega may have enjoyed higher brand profiles at the Beijing Olympics but no corporate sponsor would have savoured the event more than Abu Dhabi-based Hydra Properties – part of the Royal Group, a sprawling conglomerate owned, inevitably, by the emirate’s ruling family. The reason, apart from national pride, is that Abu Dhabi’s brasher neighbour Dubai, a mere 90-minute drive away on a desert highway, has declared an interest in hosting the 2020 Games at its almost completed Dubai Sports City.
While Western financial institutions tumble like gymnasts, the rival emirates are falling over themselves to convert their stupendous – but fleeting – oil wealth into other assets via their rulers’ turbo-charged private-equity investment vehicles, known as sovereign wealth funds. They are also competing with each other for bragging rights.
During the last decade, Dubai’s Sheikh Mohammed bin Rashid al-Maktoum has spent an estimated €45bn in a global shopping spree. Foreign pick-ups in the last 12 months alone include two British docks, swathes of Manhattan real estate, including hotels and upscale department store Barneys, chunks of Las Vegas, a stake in London’s Standard Chartered Bank, and beaches across Africa. At home, Dubai has continued to reinvent itself as Disneysand, with eye-popping hotel and leisure ventures (including ocean liner QE2, which will become a hotel and a tourist attraction), city-sized shopping malls and artificial islands, plus an international stock exchange and Emirates airline in an attempt to woo tourists and investors from Europe and Asia.
Not to be outdone, last year the Abu Dhabi Investment Authority (ADIA) – which is believed to have over €600bn to invest – took a 4.9% share in Citigroup, the world’s biggest bank and a 7.5% in Washington investment bank Carlyle Group as well as making substantial real estate investments in several American cities. The Abu Dhabi Investment Co bought the Chrysler building in New York. In August, the Mubadala Development Company bought 10% of General Electric and is believed to be in talks to buy the UK’s Gatwick and Stansted airports. In July, the Abu Dhabi National Energy Company, known as TAQA, agreed to buy a series of North Sea assets from Shell UK and Esso Exploration.
Abu Dhabi – which sits on 9% of the world’s proven hydrocarbon reserves – is unashamedly trying to market itself as a tourist destination too, pumping money into the solemnly named Office of the Brand of Abu Dhabi, created to promote the emirate abroad. A key plank in the rebranding strategy is to exploit what is widely perceived as Dubai’s absence of high culture. While Dubai trumpets its indoor ski slopes and Atlantis-themed mega resort – with 24 bottlenose dolphins flown in from the Solomon Islands – Sheikh Khalifa bin Zayed Al Nahyan is spending billions on big name museums to transform his emirate into a cultural oasis.
On Saadiyat Island, Frank Gehry, the architect behind the Guggenheim Bilbao, is building a €450m, 150,000m2 Guggenheim Museum, while French architect Jean Nouvel is designing a €300m branch of the Louvre. A 6,500-seat performing-arts centre, designed by the Iraqi-born, London-based architect Zaha Hadid, is also in the pipeline, as is its own symphony orchestra , while Sir Norman Foster is building a new national museum. Indeed there are so many signature buildings being constructed so close to each other on Saadiyat that even Gehry called the vision “a group grope… a cabinet of horrors”.
Abu Dhabi has been targeting more mainstream but culturally symbolic investments. Last year, it created a €600m production fund with Warner Bros. In September, as Dubai announced preliminary details of its fourth film festival, to be held in December, the Abu Dhabi government announced it would pump more than $1bn into Hollywood film production over the next five years.
And in a far larger exercise, fuelled as much by a desire for global respect as self-preservation, Hydra is involved in the €50bn carbon-free city Masdar – roughly a quarter of the amount the emirate is spending on infrastructure under the Plan Abu Dhabi 2030, instigated to help cope with the million more expatriate workers expected by this date. Dubai is spending €600bn on new infrastructure.
Nevertheless, it is not culture but sport where the rivalry between the two emirates is the most intense. In August, just as Dubai International Capital (DIC) was expected to tie up an on-off deal to buy England’s Liverpool Football Club – and capitalise on the global popularity of the Premier League – Mansour bin Zayed Al Nahyan, the brother of Abu Dhabi’s ruler, swooped on Manchester City, a Cinderella team in the same division.
The Manchester City deal, fronted by Hydra’s billionaire chief executive Sulaiman al-Fahim, is being presented as a financially astute investment. An 83-page document, A New Model for Partnership in Football, obtained by Arabian Business, outlines possible partnerships with multinational companies including India’s Tata and China Mobile. The document outlines a strategy to take the club to a global level, with rebranding that would see it move into financial services, fashion, retail, transport, communications, even fast food outlets. It says, perhaps a little fancifully, the brand must aim “to be the Virgin of Asia and the world”. It even features Virgin brands such as Virgin Atlantic as a comparison.
But Dubai will not allow itself to be left behind. DIC is expected to complete its purchase of Liverpool – or underperforming Newcastle, or even Manchester United – while Dubai Sports City is talking up its sporting and training facilities for an Olympics tournament or football World Cup. The real contest has only just begun. 
culture the qatari way
Opening this month is a subtler challenger for the Gulf’s cultural crown, the Museum of Islamic Art (MIA pictured) in Doha, Qatar. Designed by Chinese-American architect I.M. Pei, the museum stands guard over the harbour like an Arab citadel. Not importing western art to the Gulf like Abu Dhabi, Qatar is instead flaunting an Islamic collection to tourists and Gulf nationals alike. The museum’s director Oliver Watson emphasises the quality of the collection, the result of an extraordinary spending spree by Sheikh Saud Al-Thani, cousin of the Emir of Qatar, built the collection without regard of cost.
The emirates head to head
Dubai
Sport The Dubai Sports City complex — budgeted at €2.7bn and 4,600,000m2 — is why the emirate believes it has a crack to host the 2020 Olympics. Its championship golf course is to be designed by Ernie Els. A takeover of Liverpool FC has been mooted for some time.
Architecture The city’s most ambitious projects are being built not only upwards but also outwards, into the sea. Its artificial islands, the Palm Islands and The World, are created on miles of land reclaimed from the Gulf at a cost of about €19bn. Burj Dubai became the tallest building in the world in 2007 at 688m and is yet to reach its full height.
Media Dubai Studio City is now headquarters to more than 70 broadcasters, while more than 160 TV channels operate from Dubai Media City.
Tourism Dubai’s latest talking-point, Atlantis, opened in August: the 1,539-room hotel boasts a water park with an 11 million-litre lagoon and what is fancifully claimed to be the ruins of Atlantis.
Transport Emirates airline has just had its first Airbus A380 delivered and another 57 remain on order to add to its €20bn fleet. Dubai also struck a €4.2bn deal to buy the ports and ferries group P&O.
Culture The Art Dubai fair, which sets up its easels for the third year next March, is the largest event of its kind in the Middle East. Sotheby’s and Christie’s have opened Dubai offices, enticed not just by wealthy buyers but by the state’s zero import or export taxes for art.
Abu Dhabi
Sport Having bought 5% of the Ferrari Formula One team, Abu Dhabi will stage its first grand prix in November 2009. Sheikh Mansour Bin Zayed al-Nahyan, brother of the emirate’s ruler, bought UK Premier League club Manchester City in August and promptly broke the British transfer record by paying €41m for Brazilian striker Robinho.
Architecture Work on the world’s first ‘zero-carbon city’, Masdar began this year. Harnessing the architectural talents of Norman Foster, construction is expected to take eight years and to cost in excess of €50bn.
Media English-language newspaper The National was launched this year. The state-owned Abu Dhabi Media Co. is launching a film production arm, Imagenation, with eBay co-founder Jeff Skoll’s Participant Media, which will commit $1bn in financing over five years.
Tourism The island’s cultural district will feature some of the world’s biggest names in art and architecture. Abu Dhabi is also completing a €173m expansion of its international airport with €4.6bn earmarked for various projects and development.
Transport Etihad Airways recently announced the purchase of up to 95 Boeing wide-body jets and up to 110 Airbus planes.
Culture Completion of the Abu Dhabi franchise of the Louvre, France’s most famous museum and gallery is scheduled for 2012. It will sit next to Abu Dhabi’s version of New York’s Guggenheim gallery.
