Dubai: The freehold (or long-term leasehold) designated areas in Dubai have been expanded with the addition of two prime clusters within Dubai Investments Park, which is also a location that has seen a sharp rise in real estate development activity of late.
As per the new regulation — issued by His Highness Shaikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai — non-UAE nationals can own properties within the two clusters for a period of up to 85 years.
“The areas in and around Dubai Investments Park are becoming much sought after by investors given the industrial activity that is taking place there as well as the proximity to the Dubai World Central airport,” said Mohanad Alwadiya, managing director at Harbor Real Estate. “The confirmation of freehold status on additional areas within would interest a growing pool of investors.”
Dubai Investments Park hosts the Green Community, consistently rated among the more popular residential locations in the emirate, and more recently saw the launch of the 2,000 apartments — available on 95-year leases — making up the Ritaj development. But the development is not just about being a residential location.
Industrial and commercial real estate represent the other key components of the 2,400-hectare Park, which is currently in its Phase eight of development. This phase, costing Dh300 million and taking up 500,000 square metres, will also be the final one. It will be utilised by the logistics services industry.
“What we are seeing, especially after the Arab Spring, is a steady flow of investments for property assets in Dubai Investments Park that can provide annual yields as well as offer prospects for capital appreciation,” said Alwadiya. “The addition of more areas that non-UAE nationals can acquire is thus a timely — and extremely positive — move.”
The real estate consultancy CBRE reckons there is a “stimulus” building up for Dubai’s commercial space. According to a recent report, “It is hoped that the positive economic growth forecast for 2012 will provide a stimulus for an improvement in the overall business environment which could have a knock on impact for the commercial office sector in particular.”
Meanwhile, the addition to Dubai’s freehold stock has elicited a good deal of interest from some real estate quarters. “The demand and supply equation in Dubai is getting stabilised by the day, so it will be interesting to see how the impact will be from adding new capacity to the existing freehold stock,” said Ranjeet Chavan, director at SPF Realty, a Dubai based investment firm.
“Whatever increases the options for buyers will be to the good of the market in the longer term. Emaar recently launched two new projects to a good market response, but within its existing developments. Obviously, if new land is getting designated as freehold, the company – which has very limited land bank in Dubai - could be interested.
“The latest move by Dubai shows a return of confidence on its part vis-à-vis the real estate question. That can only be a good thing.”
