Q. Is it better to rent in a newly built residential tower or in an existing older tower? Which one am I likely to have fewer problems in?
A. A new tower does not necessarily have fewer problems than an older tower. However, the problems that do occur are likely to be due to different causes. With new towers, as you move in and start using the taps, bathrooms, light switches, kitchen equipment and the common facilities, you are likely to pick up on a large number of snags that were missed by the contractors prior to handing over.
However, these can be easily rectified as all equipment comes with a one-year warranty and the contractor is present during this first year of liability period, which means the problems you raise will be rectified at no cost to you or your landlord.
A second issue with new towers is that the facilities management (FM) company will also be new to the building and still in the process of understanding its full functionality and mechanics. This could mean that the problems that do occur take a little longer to rectify.
After a few months, the FM company will know of any common or recurring issues and be in a position either to amend them quickly or to put preventative procedures in place.
Some clients who move into new towers also complain that certain facilities are not ready for the first few weeks or months. Some have problems with the internet or TV connection.
However, if you are moving into an older building, you might encounter problems related to materials reaching the end of their expected lifetime. This can be anything from old water heaters failing, to old gym equipment being in need of replacement. You should choose a building that is architecturally sound, built using high-quality equipment — especially relating to MEP works (mechanical, electrical and plumbing) — and run by an efficient FM company.
However, it is unlikely that a tenant will have the opportunity to research all of this information before choosing a building. I would therefore advise prospective tenants to choose a tower that displays quality finishing and good facilities management. It should have been in operation for at least a few months, and the landlord should preferably have a maintenance and property management contract in place. It's normal to face some problems during your stay, however it's important that they are rectified quickly and professionally, with little disturbance to you.
Q. I have three studios in International City — China cluster. I would now like to sell them off and buy one bigger apartment elsewhere without taking a mortgage. Considering current market prices, which development should I take a look at?
The current rate for studios in International City is approximately Dh175,000, so the three studios should fetch you around Dh525,000. If you are looking for more space than a studio, the area to possibly consider for this budget would be Jumeirah Lakes Towers (JLT), where it should get you a one-bedroom unit.
You must note that the initial yield from rent would probably be less than what you can achieve in International City, which currently has some of the highest rent yields. However, in terms of location, it's advisable for investors to consider areas that are closer to the sea than inland.
The development activity in Dubailand is currently at a standstill, and it may take years before it resumes again. This has left many developments along the Emirates Road unfinished. The planned theme parks, extravagant hotels and malls that were supposed to be the main attraction of Dubailand are not likely to start construction any time soon.
The infrastructure and attractions of Dubai will be focused more towards established and complete areas. Furthermore, tourism in Dubai will naturally be focused around sun and sea, so projects near the coast will benefit the most.
JLT is seeing its retail stores come to life, with many restaurants and cafés opening. Infrastructure developments, including road improvements, are being completed and so are the lakes. This should lead to price appreciation. It is better for investors to move their investments from Dubailand projects towards established and completed areas near the developed coasts of Dubai.
Gassan Ghellal is business development manager at Halcon Real Estate
