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How easy — or otherwise — is it going to be to sell Dh21 million plus apartments in Dubai in the current soft market? The promoters behind 118 Downtown located on a prime spot next to The Dubai Mall — will soon be finding out as they get set to launch the second round of sales in January.
The G+42 212-metre project will only have one apartment to a floor, and 28 units overall. On a price per square foot basis, it works out to Dh3,100, a sizeable premium compared with the Dh1,500-Dh2,400 that projects elsewhere in that location fetch.
The project is also set for completion in the first quarter. As of now, 65 per cent is complete — having reached the 36th floor — and the topping up is set for end of November.
“There’s always a class of buyers insensitive to any downturn — that’s for whom 118 Downtown is aimed at,” said Raju Shroff, managing director of Regal Traders, who set up a joint venture with Jayant Ganwani, chief executive of Lals Group, to take up the project. “Our typical buyer will not be raising debt to make the commitment — these are people who have the spare cash and already have multiple homes.
“We are targeting those buyers on the lookout for a luxury pad for a weekend getaway or a short stay with family or friends and living right next to one of the major destinations in the city. And as the developer, we are in no rush to sell any of the inventory.”
Part of the confidence stems from having already sold nine of the units “purely based on word of mouth”. Then the sales programme was put on hold six months ago until two show homes at the high-rise are complete. Shroff makes a point of stating that the sharp correction ongoing in the marketplace did not influence the decision to stay sales. The developer has also tasked Gulf Sotheby’s — which specialises in luxury property — to bring new buyers on board.
“We have not been forced into any changes just because the market’s going through this phase,” said Ganwani. “If anything, we have value engineered to a higher quality of finish, sourcing everything — right down to the hinges — from international suppliers. And there will not be an inch of ceramic anywhere — it’s all marble. It has added to our costs, by 25 per cent or so, but that was always part of the plan.”
The developer had bought the plot at an “opportune time”, which meant that it did not have to pay a super-premium for the location. “The 118 Downtown also shares the same podium with Emaar’s Boulevard Point,” said Ganwani. “The one thing we were dead against right from the beginning was not to create another shoebox tower in the city. We are instead selling an address.”
According to Luke Hexter, Head of International Markets at Luxhabitat, “Market fluctuations tend to affect mass market stock, which has historically been bought for investment purposes in Dubai. The fundamentals remain strong — so investors who wish to wait can do so with relative confidence.
“When dealing with high-end real estate, there tends to be more parties involved in the process, so larger transactions can take longer. Negotiation times can vary; buyers and sellers know the market moves quickly in Dubai so they do not wait around if they feel they have a fair deal on the table.”