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- I am thinking of buying a villa in Al Furjan. What do you think of the community? Will there be capital appreciation in the long run?
Al Furjan is an area we are definitely focusing on. Like other new pockets in Dubai, we feel there is a lot of room for growth as more infrastructure and community services become available. Located near Al Khail and Shaikh Zayed Roads, it has easy access to all of Dubai. Prices seem more than fair in Al Furjan; therefore, if the market continues to mature, we see no reason to believe that this would not be a good investment. Aimed at young couples and families, there are several different projects and developments to choose from. Depending upon which development you choose, both villas and apartments offer spacious accommodation with good finishing. The malls, schools and food and beverage outlets in the vicinity have resulted in Al Furjan being a preference for many first-time buyers.
- I would like to know your views on the impact of property investment in Dubai?
We sincerely feel that the UAE property market is now becoming more aligned with the cycles experienced in international markets. The market here is still in its youth, but it has managed to form its own natural cycle as with markets in Europe and the USA.
There is no doubt that the population of the UAE will continue to grow, and if it does so at the same pace as we have experienced over the last two decades, demand and supply must be factored in.
A vast array of investment choices are now available ranging from large land acquisitions to off-plan transactions. Each investor has a different appetite and currently, the market offers opportunities for all investor types. Of course, the Expo 2020 must not be overlooked – that together with the increasing population and the fact that Dubai continues to be a strategic safe haven all lead to every indication that investing in the UAE is still strongly recommended.
- Where do you think is a good place to invest in Dubai?
Typically, there are two types of investments you can make. One is ready property, the other is off-plan property. You then have to decide whether your asset is residential or commercial. Then you must select an area that suits your investment appetite. The first part is a matter of preference. More often than not, the off-plan market requires less initial outlay and a strong payment plan. Of course, one must research the developer and its history before making a decision. With ready properties, they can also be very profitable; however, this is a personal choice that has to be made. In terms of residential versus commercial, depending upon the price entry point, both can be extremely viable as an investment decision. When selecting a location, one must consider existing strong areas like Burj Downtown, Dubai Marina and Business Bay; however, one should not dismiss the changing landscape of Dubai.
- Do I have to have cash to purchase any new property in the UAE?
As in most situations, cash remains king.
A 100% cash deal often results in less time being consumed in the transaction, therefore, opening up possible room for further negotiations.
Banks do provide mortgage facilities to customers who qualify for finance. Over the years, we have seen many positive changes in bank policies pertaining to both the qualifications of the customers and the borrowing amounts extended to borrowers.
You can be rest assured that these changes are also in the best interest of the customers. They not only offer banks further protection but also ensure that people do not over commit.
Typically, banks will lend up to 75% of the asset value, and all UAE banks have their own designated mortgage departments. We recommend that you research the various interest rates and fees associated with any type of borrowing before committing to any bank.
- Question of the Week: I want to set up a restaurant business in Dubai. Where is the best catchment area for such business?
It is important to understand the culture of the city before venturing into your new and hopefully successful project.
Dubai definitely has a very large ''eat out'' population; however, one must consider that soaring temperatures often result in food being delivered to residential and commercial areas.
Look for areas that already have an existing footfall, and if the rents are out of budget, make sure you are located near communities where you can deliver to. Although footfall areas are likely to be more expensive than some suburban locations, the answer really is dependent on the type of restaurant that you will be opening. For example, if you are a fast food outlet, you can easily reach the masses; however, if you are a fine dining concept, you must be located in a prime area to become a destination.
We offer consultancy services to define your business and help work with you to optimize the best location for your business. We take pride in this service and create an analysis and a feasibility study to ensure that you have factored in footfall, rents, access, high density areas and many more.
Source: Ashirwad Somani, Special to Freehold
The writer is Managing Director - Candour Real Estate
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