Dubai: Even the Palm is to have an “affordable” option — Azizi Developments is launching sales on Sunday of one-bedroom apartments from Dh2 million and two-bed units for Dh4 million. These form the 90 apartments that make up the ground plus nine-storey Royal Bay Residence project located on the Crescent of the Palm and due for delivery in March 2017. It will cost Dh350 million to build, including the cost of land.
“Developers have typically used Palm for ultra-expensive properties with huge built-up areas, and that’s been amply reflected in the eventual price tags,” said Farhad Azizi, CEO of Azizi Developments. “Our intention is to build much smaller homes than is the current Palm average and thus get the prices to start from Dh2 million for a one-bed.
“Our price per square foot would be between Dh2,500-Dh2,900 a square foot and we are not sacrificing anything by way of margins. But maintaining the space to between 802 to 1,638 square feet, we are making a property on the Palm accessible” (In the prelaunch phase, Azizi sold four floors at the Royal Bay Residence. They were acquired by a mix of local investors and those from overseas. The payments are split into 20 per cent down payment and the rest on handover.)
Much of Azizi Group’s interests are tied to real estate development, banking and oil trading in Afghanistan. Two of the Group’s subsidiaries are among the top five banks in that country.
This is the first Palm venture for the developer, who now intends to follow it up with a second one before summer this year. That project will create a further 180 apartments, and again likely to be within these price ranges. Between the two launches, Azizi is projecting a sales value of Dh1 billion plus. It was in 2013 that Azizi bought three plots on the Palm. Two of the plots are being combined for the second project.
“We are not brand new developers on the Palm as such — a few years ago we bought land on Palm Jebel Ali and that development was later put on hold,” said Azizi. “The master-developer compensated us quite generously by providing plots at the Al Furjan cluster.
“We managed to get three plots on the Palm only because Nakheel decided to divide some of the larger land into smaller footprints. As such, what we have will be among the last few launches earmarked for the original Palm.” With limited new stock emerging, demand for Palm properties could easily ride a fresh wave of demand, as and when it emerges. According to Mat Green, Head of Research and Consultancy UAE, CBRE M. E., “Despite the downtown, Palm Jumeirah remains one of Dubai’s premier waterfront developments. And while values remain under pressure for now, we can expect to see a relatively quick recovery as the market starts to improve during 2017.
“In the short term, there is increasing value for would-be investors looking to snap up properties at significantly reduced rates over the 2014 peak.”
But Azizi is looking well beyond the short term — “There’s always something or the other being built in Dubai. And whatever be the nature of the economic cycle or doubts expressed by investors, it keeps bouncing back. It happened when the big towers were announced and built as well as the malls.
“Now, if there are those who doubt what will happen to all those new projects once the Expo 2020 gets over, Dubai will certainly have an answer by then.”
His group intends to use the medium term to get into hospitality, which would tie in with its expanding interests in real estate. “It could be a mix of greenfield projects and redeveloping existing one,” said Azizi. “An exposure in hospitality is a priority for the Group — apart from having hotel apartments in Al Furjan, we will look at other options.”
On the real estate side, an entry into the UK and Canada (in Toronto) are rated as strong possibilities. It has already delivered a residential project in Frankfurt.
