Dubai: Forget for a moment all the talk about market slowdowns and weak sentiments and focus on just two numbers. In the year to end August, Dubai pulled in 9,500 investors who were acquiring a property in the city for the very first time.
Now, if these buyers hold on to their investments right through the payment period, they would have put in a combined Dh19 billion into the market, according to figures from Dubai Land Department. So, in a tight market, nearly 10,000 first-timers saw enough in Dubai to make a key investment decision.
For Dubai’s developers, the challenge now and into next year is to find ways to attract more of such buyers. The tens of thousands of new homes being built and delivered will need these first-times as much as they do investors. More flexible residency visa programmes can also help.
From tomorrow (October 2) to 4, they will have the Cityscape Global platform to pitch their offers. Already, there have been some moves by developers ahead of the actual opening — Union Properties announced a Dh2.5 billion “Avenue District” carved out of its Motor City master-development. A mix of residential and retail will take up much of the built space there, and includes a 100,000 square feet BMW and Mini showroom.
And there’re other numbers property buyers in Dubai will come across — the 5 per cent and 10 per cent down payments. The developer Seven Tides is having a 5 per cent scheme for its recently launched Dh1.3 billion Se7en City project at JLT.
This will be “followed by payments equal to 6 per cent of the cost price, to be paid every subsequent quarter, with a completion date of Q3-21,” said Abdullah Bin Sulayem, CEO. “We estimate that the studios should yield 12 per cent per annum.” (Studios start from Dh393,000 and one-bedroom apartments from Dh760,000.)
For those investors thinking beyond apartments and villas, there are always the plots to go after. “Investors are attracted by plots now available for Dh325 per square feet compared with Dh700-Dh800 per square foot in 2007-08,” said Firas Al Msaddi, CEO of fam Properties. “That means huge savings in outlay, and a properly planned development strategy can maximise the return on investment.”
Even in the office space, there are opportunities even in the current challenging environment. The consultancy JLL in its latest report suggests that “The importance of promoting innovation and attracting more start-up businesses has now been recognised and is a key part of the government’s strategy for the next stage of Dubai’s economic development.
“This is playing out in the real estate sector with the development of many new “flexible office” concepts aimed at promoting innovation and fostering the creation and growth of start-up businesses (including Fin Tech Hub, and the Innovation Hub in Tecom).”
JLL estimates there are more than 50 flexible office projects, offering leases of less than one year and delivering around 62,000 square metres of space. “While this total has risen rapidly in recent years, it still comprises less than 0.7 per cent of the total office stock in Dubai, compared to between 3-5 per cent of the office inventory in London and other mature markets across Europe.”
Each of emirates are doing their bit to keep the real estate sector ticking. The Sharjah Investment and Development Authority (Shurooq) is launching all-encompassing development and redesign of Khorfakkan Beach.
This will add to the “tourism appeal of Khorfakkan city and the east coast in general”, Shurooq said in a statement. According to Marwan Bin Jassim Al Sarkal, Executive Chairman of Shurooq, “This project is part of our comprehensive strategic plan to develop the Eastern region of Sharjah.”
And Abu Dhabi is getting a Riviera, courtesy of Imkan, while Ras Al Khaimah hones its tourism potential through a cluster of islands and mangroves.
Clearly, there is purpose behind the Emirates’ brick-and-mortar gameplan.
Amid the many development strategies that make up Dubai’s real estate, there will always be space for fashion.
DICO International, the investment arm of Damac Properties’ Chairman Hussain Sajwani, has entered a hospitality partnership with the Roberto Cavalli Group. This will see the first “Aykon Hotel with interior design by Roberto Cavalli” branded properties in Dubai.