Dubai: Owners of existing upscale villas, penthouses and apartments in Dubai have another option opening up for them to make some serious money from these assets.
Give these properties - whether 5-, 10- or 15-year vintage - an extensive makeover, add some more features to embellish the living spaces, and place them in the market for an immediate sale. The owners could be in line for 20-30 per cent plus return on their investments. (Some market sources say, the returns could be in that ‘plus’ category.)
Yes, the business of fixing-upping is turning into a serious opportunity for those investors holding slightly older properties and which need a jazzing up. And right now, they could be sitting on a mine of opportunities.
Because try and they might, it will be another 2-3 years before developers in Dubai ready their next lot of luxury/super-luxury homes. What’s being handed over are just not enough to meet the demand going around.
This is where owners and their existing properties come in. The makeover action is mostly happening at the top end of the property space, typically involving homes in the Dh100 million and well over space.
“The current trend is for refurbishments and/or re-modelling of villas done to the highest specs and then re-sold,” said Ranjeet Chavan, founder and CEO of Nautilus Real Estate. “There are many older villas in Dubai that with the right sort of makeover can command significant premium in the secondary market.
The who’s who of the world knows Dubai and it’s unbelievable the amount of money that’s still available for spending on luxury assets in Dubai.
“You see that with the demand for luxury cars and luxury watches – why should it be any different for luxury villas?”
Same rules can apply for sub-Dh100m properties
It needn’t be that makeovers only make sense for Dh100 million plus homes. The fixer-upper strategy can pay off just as handsomely for a Dh50 million penthouse at Dubai Marina or the Downtown. And for properties even further down the value chain. (Think of a prime Dh5 million to Dh10 million residential property in a coveted location in the city. Give it a few designer touches, and the seller might get what he wants...)
“If by investing in the re-modelling, the investor gets an almost immediate payback of 25-50 per cent mark-up when he sells, why not do it,” said an estate agent. “Demand from investors for prime property in Dubai is not drying up. Yes, this summer hasn’t seen the headline grabbing Dh100 million deals, but it should start again soon.”
Specialist home makeover companies such as AHS Properties from Abbas Sajwani have been quite active in this space, through acquiring the property or working closely with the owner to remodel the unit.
Narrow window of opportunity?
For sellers, all the market forces are aligning in their favour. Nearly all of the available inventory of pricey ready homes in Dubai have been sold/re-sold. Developers have been quick to launch super-premium projects in 2022 and this year, but those will take 3-5 years for completion and for buyers to take possession.
“Not every buyer out there wants to wait that long,” said a property analyst. “A billionaire/millionaire might want a beachfront mansion in Dubai to move into right now, or in 6 months. This is why villa makeovers are proving exceptionally popular – make it look as good as new in 6-12 months and then sell.”
There is always a ready buyer these days…
