Dubai: Want to pick up a property and then pay for it over 10 years?
These days, a home is not the only piece of real estate in Dubai with such extended payment plans. Even a warehouse can be bought this way.
Lootah Real Estate Development is offering warehouse investors such an option at its latest project, located in Dubai Industrial Park in Jebel Ali.
“The sale is structured as a lease-to-own, with a 10-year payment cycle,” said Mustafa Jassem, Director of Marketing and Sales. “The property — which is the warehouse — will revert to the investor’s ownership at the end of the period.”
In all, the warehousing cluster, branded as Senaeyat, will offer about 40 units, with sizes ranging from 20,000 to 100,000 square feet. Prices are set from Dh10 million. The cost of developing the cluster is estimated at Dh300 million, with completion scheduled for the third quarter of next year.
“We don’t intent to lease out any of the units — the intention is to find a buyer for each one through the lease-to-own structure,” said Jassem.
Even when property values dropped in the residential, office and retail spaces, industrial real estate in Dubai has managed to hold its own over the last four years. There have been corrections as newer stock got built and delivered, but there was never a price erosion as in other property classes. Much the same has been happening with labour housing.
Another plus for this category is the presence of real estate investment trusts (REITs), which have taken up exposures in a big way. These REITs — Emirates REIT, ENBD REIT and Manrre Reit from Palmon Group — are likely to continue their buying or long-term leasing spree for some time.
“Even with more warehouses, I don’t think there will be a major drop in asset prices… only corrections,” said Jassem. “Land prices too are reasonable to build on. But what we don’t want to do is build just because land has become cheaper.
“Cheap land doesn’t necessarily make for a good location, unless there is infrastructure and power supply to tap into.”
As of now, the Jebel Ali area and Dubai Investment Park are the prime areas for industrial real estate. More zones are being created in and around Al Maktoum International Airport/Dubai South.
Lootah Real Estate Development last year completed another warehousing project, at Dubai Investment Park. Called W10, in terms of scale, it was much smaller than the new one it has taken up.
“Of late, we are giving commercial/industrial real estate development more attention,” Jassem said. “Yes, it’s getting to be a sizeable part of our overall portfolio — but in sheer volume terms, residential is still tops.”
The company’s track record includes the Ewan Residences at Dubai Investment Park, and the Living Garden and Shamal Residences projects in Jumeirah Village Circle.
Lootah Real Estate plans to scale up in Ajman
Feasibility studies are on for a Dh400 million residential project in Ajman’s Masfout area, set between scenic mountains and adjacent to Hatta.
Lootah Real Estate Development will be a joint venture partner in the proposed project, with an Ajman Government owned entity being the other stakeholder, according to Mustafa Jassem.
“There will be elements of hospitality as well — but these are very early days,” said Jassem. “The available land area is 5 million square feet, but there are so many details that will need finalising before we mobilise on the ground.”
Ajman currently has one major ongoing mixed-use development, which is Al Zorah, being developed by a joint venture in which Solidere International has a sizeable stake.