Dubai
After a gap of a few months, Business Bay is again buzzing to the sound of new off-plan launches.
A three-way alliance involving Fortune 5, Arabian Gulf Properties and Time Properties is helming a new ground plus 26-storey (including three podium levels) residential project, AG Tower, at the master-development. Expected to cost Dh450 million to develop, the promoters look to generate sales proceeds of around Dh700 from apartment sales. The retail portion will be retained for future rental income. (The AG Tower overlooks the Meydan area and Al Khail Road.)
Thirty per cent of the apartment units — of which there will be 437 overall — is now being released in the first tranche, at Dh1,400 a square foot and the second likely to follow after Ramadan, according to Prem Gopalani, executive chairman at Fortune 5. The second release too would have a similar pricing, he added.
Just recently, Saudi headquartered RP Group confirmed it will look to an end of the year launch for its Business Bay project, which would also be the second tallest tower in Dubai. (Early last year, Deyaar launched a Dh900 million twin-tower project, Atria, to a buoyant sales response. But since then the number of new launches in Business Bay have been limited.)
“There will be a lot of future development and buying activity centred around Business Bay, given the proximity it has to the Downtown,” said Gopalani. “For private developers, there is not much more they can do in Downtown itself ... Emaar (as master-developer) will always have control. So, the next logical step for private developers is to go to Business Bay.”
According to Gopalani, from a buyer’s perspective, there is the pricing advantage to be had — “Business Bay off-plan prices are still around Dh1,400-Dh1,500 a square foot compared with the Dh2,500-Dh3,000 in Downtown.
“There are a further three or four plots which we could develop in Business Bay — we could look at a higher sales price for them.”
Incidentally, Business Bay was the top investor location for apartments in the first three months (totalling Dh1.84 billion), pipping Dubai Marina, according to figures from Dubai Land Department. Occupancy levels for the completed properties there are now at 80 per cent.
“Unless a buyer wants to move into an existing property immediately, there are advantages to buying off-plan in Business Bay,” said Niraj Masand, Partner at Banke M.E., a property services firm. “The buyer can benefit from committing to a payment plan that stretches across the construction period and even post-handover.
“As against that, a ready property requires committing investments — either own cash or via a mortgage plan — upfront. There are also some secondary units going for Dh1,300 or thereabouts.
“The second-half of the year should see more project launches at Business Bay — there’s a more realistic assessment of pricing structures on the developers’ side.”
