Dubai property market is going through a fourth successive year of high powered growth. Developers are angling for new land deals - and legacy projects are where some of them are finding value. Image Credit: WAM

Dubai: Another of Dubai’s legacy projects from 2005 is getting a new lease of life.

The ‘Dubai Lifestyle City’, originally launched by ETA, has just seen 68 plots getting a bid of Dh175.6 million. The location in Dubailand has had heavy infrastructure and related development activity in recent years, which should ease the path for the new buyer of Lifestyle City to move ahead with any project.

Interestingly, there was only one bidder for the project. Lifestyle City had been listed twice before, but without getting any bids. (The project when it announced in the mid-2000s was conceived as an upscale residential community, and was one among the first such from a private developer. Until then, that freehold sub-market was heavily dominated by Emaar and Nakheel, with private developers focusing on tower projects.)

Falcon City sales

The auction of Lifestyle City represents the second such sell-off of a project from that period. Earlier, the Falcon City development saw 794 plots being bought, for Dh1.3 billion after an initial listing at Dh2.5 billion. This too is in Dubailand.

In the current Dubai real estate boom, investors and developers are seeing extreme potential to revisit past projects and revive them. Of course, there will be extensive redesigns involved as well as repurposing, but for the new buyers, it’s all worth the effort. Given some of these are distressed projects being sold through auctions, for the seller it helps them clear some of the debts owed to them. All in all, a win-win case.

“Legacy projects are being revived through the auction process - investors would be well-advised to use this route to get large land banks that are clear of liabilities,” said Fadi Massouh, CEO of Ai Real Estate, an advisory firm.

Select Group's Six Senses project in Dubai Marina. It will come up on a site that was meant for one of Dubai's first batch of skyscrapers, the all-penthouse 'Pentominium' tower. Image Credit: Select Group

This is also the third such project from 2005-8 to be sold through an auction, with that of the luxury 'Pentominium' skyscraper site in Dubai Marina being the other. That was bought for $100 million and has found a new life as a Six Senses branded development in the works from Select Group.

Land gets pricey - and scarce

For some time now, private developers and investors have been talking about not finding new land to launch projects. Whatever is available already have buyers, or will soon do so. "New land releases from master-developers are highly anticipated, but not enough land supply is available in established freehold zones," said an investor. "This is why turning to auctions and checking out availability makes sense." (To offset the issue of land availability, developers are even pooling resources to launch projects, with someone bringing land into the project while the other does the build up.)

Also, land prices have shot up significantly in these last two years, and a trend that's filtering through even into emerging locations. "Depending on the location, it would be no surprise that land values have doubled in the recent past," said Vijay Doshi, Managing Director of the developer Vincitore in a recent interview.