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In December Dubai Properties (DP), the project development arm of Dubai Properties Group (DPG), awarded a Dh541-million contract to Engineering Contracting Co. for an 18-building expansion of its Remraam community in Dubailand. Mohammad Al Habbai, Chief Officer for Urban Planning and Infrastructure at DPG, says the project targets the mid-income category, responding to a fast emerging gap in the market.
''With the increased demand for residential property in the mid-income sector, and given Remraam's popularity in this particular segment, these additional units are designed to respond to the needs of the [market],'' Al Habbai said during the contract announcement.
''This is a new milestone in the development of Remraam, as it will allow us to offer even more convenient, reasonably priced units for Dubai residents and investors in one of the city's most strategic locations, adjacent to the Expo 2020 site.''
Remraam, which has studios, one-, two- and three-bedroom apartments, is located at the centre of Dubailand, just off Emirates Road and between Jebel Ali Free Zone and Al Maktoum International Airport. Al Habbai tells Propert Weekly the 50-million-sq-m freehold community is one of the most affordable residential options in Dubai at present.
''Remraam is targeting mid-income individuals [who want] a high-quality standard of living. It has all the services available, such as gyms, swimming pools, barbecue areas and gardens,'' he says. ''There is a need for affordable houses as there is a new [type of] customer coming to Dubai [who] enjoys living here. At the moment, I wouldn't say this sector is being ignored, but no one has really targeted it. So we realised that there is an opportunity for us [here].''
He adds that Expo 2020 will further boost demand for affordable housing. But how does DP distinguish the mid-income segment?
''According to Colliers International's latest report, mid-income is between Dh9,000 and Dh15,000 per month, and that's who we are targeting,'' Al Habbai says.
''Phase one has already been completed, and we are scheduled to start phase two soon. The price range is very attractive, starting from Dh400,000 [for a studio], and obviously prices depend on the exact location and unit size. We are working with a couple of banks to help finance and assist customers.''
Those looking for a one bedroom apartment can expect to fork out between Dh650,000 and Dh950,000. Two-bedroom apartments start from Dh1 million, while the smallest three-bedroom apartment costs around Dh1.46 million.
One of the UAE's biggest developers, DP is involved in a plethora of projects, and is responsible for project development, sales and customer service and handover management. Its portfolio consists of residential, commercial, retail and hospitality projects across Dubai, including Manazel Al Khor and Dubai Wharf at Dubai Creek.
''DP caters to the whole market—from the luxurious all the way to staff accommodation,'' Al Habbai says. ''The mid-income market needs someone to cater for it. [Many of] the individual investors who invested in Dubailand only catered for the high-end market.''
So why initiate such a project only now? ''It's not a small market — we need to diversify our product,'' he explains. ''Not everyone wants to live in a high-end, luxurious property. They just want to live in a proper, decent [housing] unit.''
''[Demand for affordable housing] will increase the number of residents moving to Dubai. And the emirate needs it. Otherwise, it will continue to be perceived as one of the most expensive cities to live in.''
Diversification and catering to lower-income brackets will naturally have a knock on effect on rents, says Al Habbai. ''We've noticed lately that pricing is going up. With the mid-income priced property, it will bring rentals down, making the market more realistic.''
While there's no doubt that the move to offer more affordable accommodation in the emirate will be welcomed by most, Remraam hasn't been immune to a few hiccups. Local newspapers have in the past reported of cases where investors were not delivered what they were promised, following a change in building plans.
In 2013, the development was at the centre of a contamination scare after water testing by Dubai Municipality showed Bromate levels to be 23 times higher than allowable health limits. In response, DPG drained, cleaned and refilled the water tanks in all buildings, and within a month, tests revealed that water was safe to drink.
Work in progress
Although many families are already living in the community, a lot of facilities are still unavailable. For example, a Geant supermarket has been in the works for some time, although Al Habbai says it will open soon. DP is also still working on a school and community centre.
Nevertheless, with units selling out almost as soon as they are released, Remraam is clearly getting attention as a competitively priced housing project. While there is no data available for the types of buyers who have invested in Remraam, insiders believe property values in the community are set to increase in the coming years.
''The location is ideal for residents — between two airports and easy access to Downtown Dubai as well as the Palm Jumeirah. Etihad Rail is set to have a station in Remraam, and this will raise the value of property for those buying today.''
Source: Rachel McArthur, Special to Property Weekly