Dubai: As far as incentives go, ensuring a 10 per cent guaranteed return on investment is no easy task. And more so when it’s being offered over three- and five-year stretches.
The details don’t faze Abdullah Bin Sulayem, CEO of Seven Tides, the developer with a portfolio of premium projects on the Palm. And it was for two of these developments — the Anantara Residences and Dukes Dubai — that Seven Tides had the 10 per cent (on the purchase price net of costs, paid quarterly) sweetener on offer for investors in the hotel rooms.
“It was our way of showing that we could offer something that was way more than competitive,” said Bin Sulayem. “There are developers who have had offers of 5, 6 or even 7 per cent. By making ours 10 per cent, it was sending a clear message that this was something special.”
Starting prices for the Anantara units are from Dh1.3 million, while for Dukes Dubai these were upwards of Dh1.8 million.
They have had a wholesome response from those buyers for whom an investment on the Palm is still the best deal in town. And when the developer is offering double-digit guarantees, it does enough to spice up their interest even more. (The Dukes’ unit sales have crossed 90 per cent, while all 73 hotel rooms at Anantara Phase 1 are sold following their December release. Of the residences, sales are now past the 65 per cent mark.)
“It did make our project one of the few on the Palm to average higher in the secondary market,” said Bin Sulayem. “We spent a fair amount of time in designing what people want — we built a poolside podium which would allow the resident to step out of the apartment in his flip-flops, go down the lift and immediately enter a resort-type environment. Not many developers go for those extra details. We tend to invest a lot on the amenities and that’s how I want it.”
But doesn’t offering post-handover financial guarantees bind the developer into potentially stick situations if the market turns soft? And similar to how the market has been faring of late?
“We have done our research and found mechanisms to guarantee that we can deliver those returns,” the CEO said. “The guarantee is that 12 months from the day of opening of the property, the investors will have the promised sum net of costs.”
With the residences going into the rental pool, the developer believes that enough visitor numbers all-year round and at rates that are at a premium will do the needful. Dukes Dubai is due for a Q4-16 opening.
Launched in 2004, Seven Tides’ development portfolio is now valued at Dh3 billion, which includes the quite distinctive Ibn Battuta Gate property as well, located close to the mall. On the Palm, it also owns the Oceana.
It is no accident that the developer has been following a well-staggered launch schedule. “As a company, we would rather start construction before we start talking about a project,” said Bin Sulayem. “After Oceana we looked around for several years before launching Dukes.
“With many announcements, there’s this impression the people are talking about dreams and of things that might or might not happen. I would prefer to focus only on the actuals.
“Seven Tides is not overly focused on the Palm — we will be announcing something related to the Ibn Battuta Gate shortly. This will be by adding hotel apartments to go along with the hotel, the residences and office space.”
It hasn’t been revealed whether the latest launch too will have a guaranteed return — Bin Sulyayem is not telling. Investors will just need to watch this space.
The Palm beats to a different tempo
Top of the line apartment buildings on the Palm are holding their own amid the major corrections the rest of Dubai’s property market has been through in recent quarters. “Prices in the secondary market for the Fairmont Residences, Oceana Tiara and the Anantara Residences on the Crescent are currently ranging from Dh1,250 a square foot all the way up to Dh2,500,” says David Godchaux, CEO Core, UAE associate of Savills.
Prices for the villas have dipped a little, according to Godchaux. In the year to date, there have been just over 20 villa sales. “There is still a large range in prices, from Dh1,600 — D4,500 per square foot ... but there are contributing factors here such as location, frond, town houses, etc,” Godchaux added. “The prices on the Palm have indeed stabilised, with some properties transacting as low as Dh900. This has led the Palm to become a more affordable option for investors and end users.”
