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Dubai: It’s always spring at the Palm. Whatever be the demand dynamics in the rest of the market, projects on the Palm Jumeirah do not seem to have much of a problem attracting the seriously wealthy investor.
Muraba Properties, which is developing a decidedly premium apartment block there, has confirmed that more than 25 per cent of the 46 units have been snapped up since they were offered in January. The UAE and Gulf investors represent the majority in these transactions, and there have been buyers from the UK and Russia, in spite of the rouble wobble. The units — all of which are sea-facing within the G+9 structure — are going for Dh2,700 a square foot and over. All of the buyers, not surprisingly, prefer to seal the deal with cash.
Muraba’s experience with the new project clearly underscores that latent demand is still very much there in Dubai. Sure, demand and transaction levels have tailed off appreciably since the second-half of last year. But for the right location — and Palm’s credentials remain just an enduring — and for projects that do not hold back on upscale design and build elements, buyers are still coming through.
“You certainly don’t see the wealthy not buying new cars, watches or taking a vacation,” said Ebrahim Al Ghurair, founder of Muraba Properties, for whom this is his first real estate venture in an individual capacity. “There’s this same attitude when it comes to buying property on the Palm. With this project, we only want to target the end user and not a speculator who might want to use the asset as a hedge.”
The master-developer Nakheel has been keeping the Palm pipeline busy with its own projects, including those launched at Cityscape last September. There have also been those from Omniyat and other private developers. A few more could be on the way at, for instance, the seven plots adjacent to where Muraba is building its project.
But “Due to the huge success of the Palm, there is very little land now available for development,” said Luke Hexter, Head of International Markets at Luxhabitat, a specialist estate agency. “The last plots on the fronds are in the secondary market now, and the remaining on the crescent are being used for a mix of hotels and residences.
“Nine of the 10 highest value properties sold in Dubai of Q1-2014 were on the Palm. We received an increase in buyer inquires then due to a number of factors, such as the Expo 2020, strong investor confidence in Dubai, good economic performance and the announcement of the Nakheel mall project on the island.
“Off-plan opportunities predominately are through hotel developers, in line with the current market rate, though some luxury developers [are also] starting new off-plan projects shortly.”
Investors with ready properties on the Palm Jumeirah are also playing a waiting game. Some of them are holding back on selling given the current market softness. “In some instances, sellers would like to wait for higher prices ... however, this is the case in every type of market,” said Hexter. “The correction has bought Dubai real estate to safer, sustainable growth levels in line with more seasoned housing markets.
“Due to this, Luxhabitat has moved into markets such as Africa, Russia, and China to help facilitate high net worth individuals wishing to purchase here. We are seeing increased interest from Africa, especially Nigeria.”