AFP

DUBAI - A Dubai government firm on Monday announced it will build a 'new city' in the booming Gulf emirate at a projected cost of 95 billion dollars, shrugging off the global financial turmoil.

The mixed-use Jumeirah Gardens development will be "an integrated city within a city," to be built over 12 years, Meraas Development said at the opening of Cityscape 2008, a four-day international real estate exhibition.

The announcement came one day after Dubai developers Nakheel said it planned to build a tower which could stand one kilometre tall (3,280 feet), beating the city's own world record.

Dubai, part of the oil-rich United Arab Emirates, already boasts the world's tallest building, the yet to be completed Burj Dubai tower, which reached a height of 688 metres (2,257 feet) at the start of September and is still growing, according to developers Emaar.

It now has 160 storeys, the highest skyscraper in the world, Emaar said.

Jumeirah Gardens will stretch north of Sheikh Zayed Road, Dubai's main thoroughfare linking it to the UAE capital of Abu Dhabi, 150 kilometres (95 miles) to the south.

Meraas Development said that Jumeirah Gardens will comprise business, residential and leisure facilities linked by a transportation network and including some of the city's biggest towers, and with a large canal running through the development.

The announcement came at the opening of the Cityscape exhibition, an annual feature on the property calendar of Dubai, a regional business and tourism hub which is in the midst of a construction frenzy and aims to rival financial centres like London and New York.

But Dubai has not been spared the turmoil on world markets.

Dubai Financial Market dropped 7.6 percent on Monday to its lowest level in more than 18 months. The market has lost around 14 percent in the past two days amid the world financial crisis.