Wednesday, April 28, 2010

Armani and art restore some of Dubai’s glitz

Forging new frontiers is nothing new for Giorgio Armani. But even the renowned fashion designer must have been relieved when he took the applause on Tuesday night at the end of a fashion show to open the Armani Dubai hotel.

The event was the realisation of a five-year plan to launch a chain of branded hotels with Emaar, the region’s largest developer.
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But in a sign that Dubai is starting to bounce back from its economic woes of the past two years – including amassing more than $100m of government-related debt, Mr Armani had to share the evening’s spotlight.

A short hop across town, Christie’s held an auction of regional art which achieved “spectacular” prices as regional buyers bid for a prized collection of modern Egyptian art. The sale made $15m (€11.4m, £10m), triple the estimate, with one work, “Les Chadoufs” by Mahmoud Said, going for $2.43m, a record for such art.

The cool lines of the Armani hotel, a minimalist island in a sea of gaudy hotels, combined with frenetic bidding at the auction to act as a reminder that the city remains the region’s hospitality hub and is now taking its place on the global stage as a commercial art centre.

Analysts caution, however, that the emirate still has a long way to go before it can boast achieving a full recovery. The hotel and residences take up the first eight floors of the $1.5bn Burj Khalifa, the world’s tallest tower, renamed last year after the ruler of the United Arab Emirates, in a gesture of federal solidarity after Abu Dhabi bailed out Dubai with $20bn in emergency loans.

At the launch, Mr Armani joked about the design rigours he had imposed on the construction. “I would like to thank you all, because I know it is hard to work with Mr Armani,” he said.

As the credit crunch took its toll on Dubai, rumours had spread that the five-year project was hitting the skids as Emaar’s once free-flowing cash flows dried up.

But Mohammed Alabbar, Emaar’s chairman, said the developer had increased spending on the hotel through the crisis and shrugged off its impact on Dubai. “Cycles come and go,” he said.

A Milan branch opens next year and a Moroccan resort the year after, with plans for more hotels in Tokyo and New York.

Despite Dubai’s shift towards a more conservative approach as it comes down from the highs of the boom, the city remains a relative beacon of tolerance that continues to attract foreigners, including Mr Armani, who took to the DJ booth at the after-party in Dubai’s latest nightclub.

The emirate’s hotel market, while hit by the recession, has held up by discounting room rates. But the Armani hotel will target wealthy travellers with prices starting at about $1,000 a night.

Christie’s executives said its auction, its eighth of Middle Eastern art in Dubai, was clear evidence of the region’s recovery. “We could never have achieved prices at that level anywhere else in the world,” said Jussi Pylkk√§nen, president of Christie’s Middle East and Europe.

The regular Dubai crowd of Iranians and Emiratis was joined by Egyptian collectors mainly bidding on phones and online from around the world, edging out institutional bids for the 25 modern pieces.

Prices for other contemporary Middle Eastern artists also showed signs of recovery after a dip over the past couple of years.

“Dubai sales have become accepted as part of the international contemporary programme,” added Mr Pylkk√§nen.

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