Dubai: Investors seeking better-than-average yields are, once again, starting to line up behind delayed or distressed projects in Dubai.
“It happened in 2010-11 when there were a lot of such projects,” said Balaji Parthasarathy, director at Radiant Star, a recently created investment arm that has to date raised Dh150 million for local projects. “New investors could came into and revive — there are similar opportunities available now.”
“But there are differences in investor preferences between then and now. In 2010-11, the motivating factor was whether a project had attained a 70-80 per cent off-plan before it ran into problems. Location was secondary in their preferences.
“But, now, it’s all about where the project is located. That’s what gets investors most excited. Even now, they can pick up projects in need of funds in highly developed clusters such as Dubai Marina and Business Bay. The only thing to keep in mind is that regulatory clearances can take a bit of time.”
Recently, a top Select Group official confirmed that it is taking over a stalled tower project at the Dubai Marina, a master-development where it already has multiple projects that are handed over or at an advanced stage of construction.
Newer locations are also featuring on investor radars. Radiant Star has come on board a high-end 18-storey residential building (Riah Towers) in Culture Village. It’s portfolio also features three projects in Jumeirah Village Circle, but this is the first time it is pitching into one at the premium end of the residential market.
The Riah Towers, featuring 156 apartments and penthouses, have an average price of Dh1,400 a square foot.
“With our funds, we acquired ownership of part of the land,” said Parthasarathy. “Work on the structure of the building was already advanced when it got stalled. Thereafter, we came on board and [the] structure has progressed to the 70 per cent [completion] stage. With a gross development and sales value of Dh324 million, it will be ready for handover in [the fourth quarter of] 2016. As a location, Culture Village will have a lot going for it in the future and private developers are starting to show it a lot of attention.”
Dubai Properties is the master-developer of Culture Village, which occupies a prime spot on the Creek waterfront. Privately-owned Enshaa is the developer behind the Palazzo Versace and D1 Tower.
“Private developers are yet to get cracking in sizeable numbers at the Culture Village... we believe this will give us a selling advantage,” said Parthasarathy.
“As of now, we are hoping to get estate agents to get interested in what’s being offered and, closer to completion in September, will get on board buyers.”
