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How could any developer possibly proceed with a $2.4bn building contract for the Pearl Dubai, an iconic multi-tower development opposite the Palm Jumeirah, in the current economic environment? Has Abdul Majid Esmail Al Fahim lost his mind?

Anybody who has read the story of how this remarkable Abu Dhabi family moved from rags to riches within little more than a generation ought to stop and think before arriving at such a conclusion.

Is Dubai not about to suffer a surfeit of accommodation as local firms downsize for the recession? But of course the project will not be hitting the market next year

Yet on the face of it awarding one of the largest ever building contracts in the history of the Gulf yesterday to Al Habtoor Leighton looks like madness. Is Dubai not about to suffer a surfeit of accommodation as local firms downsize for the recession next year?

Perhaps - although the real estate market is still pretty tight on the rental side. But of course the Al Fahim project will not be hitting the market next year. Projects like this generally take at least three to five years, even in Dubai. By then the city will probably be booming again.

The word is that the Al Fahims have been selling local hotel assets at the top of the market ready for the downturn and in order to finance the Pearl Dubai

The Al Fahim family is no stranger to economic cycles. The word is that they have been selling local hotel assets at the top of the market in the UAE ready for the downturn and in order to finance the Pearl Dubai from their own resources: no need then to worry about the global financial crisis and borrowings.

Plus, in a cyclical downturn a project is far less likely to suffer from building material or labour cost inflation. You set the price for the contract and it will come in on time and to budget, ready to meet a cyclical upturn in rental demand.

In a cyclical downturn a project is far less likely to suffer from cost inflation – it will come in on time and to budget, ready to meet an upturn in demand

To be quite sure of success, Al Fahim has gone for location, location, location - with a unique site facing on to the Palm Jumierah, the icon of Dubai. It is also clear that the developer is going to squeeze maximum value out of this land area, with no less than four 73-storey towers as well as a premium shopping mall, 2,000-seat theatre and top hotels.

The Al Fahim family has removed itself from serious poverty to mega-riches in a generation by skillfully taking advantage of the opportunities offered by the UAE. The siting of its latest and most ambitious real estate development bang in the middle of New Dubai ought to be a lesson to others with less nerve in these troubled times. But, clearly, those whose cash position and market timing is not as good are going to have a much rougher ride.