Dubai: It’s an old saying in property circles that prospects of a new location are as good as its secondary market prospects. By that measure, it is still early days to make a definitive call on where the multi-billion dirham MBR and Meydan cities are headed for.
But one need not wait that long either – “There has been an increase – quite noticeable at that - in secondary market activity even now at Meydan, but a significant appreciation is likely to happen as the area develops, specifically by Cityscape 2013 (in early October),” said Kalpesh Sampat of SPF Realty.
According to Deepak Jain of Jones Lang LaSalle, “Whilst a number of new developments are being planned, we do see some slackening of supply in the high-end range due to the summer period; we will see several new launches not necessarily in Q3 but most certainly in Q4 around and during Cityscape Global in October 2013 as well as during early 2014.
“Having said that, there is a recognition amongst most developers to focus more on the sub-Dh4 million market for single-family housing projects along Mohammad Bin Zayed Road; we expect a majority of new projects to be more in this range. We believe that the pricing is in sync with comparable developments in Dubai.”
New launches – and by extension increased secondary market activity thereafter – by that timeframe would determine where exactly MBR and Meydan cities figure within Dubai’s universe of super-premium locations. There is, of course, the Palm where properties have recently fetched Dh1,800 a square foot, while Downtown – and the Burj – has been steadily clocking up higher transactional values.
Only a handful of launches have so far taken place at MBR and Meydan master-developments, and there is a sense that the promoters are also trying to get a feel of the market. At the latter, there have been two, with G&Co coming out with 198 villas – and a price tag of Dh1,065 to Dh1,250 a square foot - in April and followed by another from Sobha Group in June, with prices of “approximately Dh1,600 a square foot with a construction-linked payment plan,” said Sampat. (Sobha in a joint venture with Meydan is also helming a distinctly upscale project at MBR City. Emaar is another to have homed in on the sprawling master-development, in tandem with Meraas. Clearly, developers see strength in joining forces.)
G&Co’s payment in comparison was back-loaded with 75 per cent of it falling due on completion. “Real estate close to a race course in any city in the world is considered prime real estate and always has a substantial premium compared to other areas,” said Sampat. “As such, historically, Meydan and Nad Al Sheba have been considered a prestigious location by the local community.”
Market sources suggest that other developers would hold off until September and October’s Cityscape before unveiling their plans for the two new mini “cities”. “By then the pricing levels on existing projects in MBR and Meydan would have secured enough traction with investors and form the foundation for other projects to come through the pipeline,” said a market analyst. “Prospective project promoters want to be assured that the prices are comfortable with target buyers, particularly as these projects are long term in nature.”
More than anything else, stakeholders in the property market, and that includes investors, realise fundamentals are driving demand at this point. Sure there is some degree of speculation, but that still range bound.
“Dubai has always attracted a wide range of investors and end-users, and this trend will not stop as the market continues to deliver a broad range of both completed projects and communities together with projects under development catering from the low-to-mid range through to the high-end in terms of value,” said Simon Gray, managing director of Chesterton International.