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The scarcity of parking space in Jumeirah Lakes Towers (JLT), Dubai Marina and other developed communities in Dubai and other emirates has become a growing problem. The limited space and the high demand have now forced many people to pay huge amounts for parking bays.
In Abu Dhabi, the government launched a park and ride initiative on Saturday aimed at reducing congestion on the capital's roads and car parks.
''There are not enough parking spaces assigned per apartment by tower developers,'' says Mario Volpi, Managing Director at Prestige Real Estate. ''Most developers, especially in areas such as JLT, Business Bay and Dubai International Financial Centre, offer parking bays for as much as Dhl25,000 per space. It will not surprise me if this figure will increase in the future.''
With Dubai's residential property market rebounding strongly, the opportunity cost of devoting land to parking is rising, warns Khawar Khan, Research Manager at Knight Frank. ''Empty, sandy patches, which many use as free parking areas, are becoming scarce in some locations,'' he says. ''This in turn has meant that dedicated parking spaces are starting to fetch a premium in some parts of town.
''Some developers are even starting to use it as another source of revenue. However, this is largely restricted to fairly well-developed and popular locations such as Downtown Dubai.''
Parking bays were already being sold to landlords as far back as 2005, when people were buying and selling prelaunch properties, points out Pawan Batavia, Director at Synergy Properties.
''Some leading developers were selling a parking space for Dh50,000. Now, since the demand in certain areas has gone up significantly, the prices for these units have risen sharply. Developers are now charging up to Dh100,000 for car parking that used to cost Dh50,000.''
Parking units in commercial buildings have become a lucrative investment, says Batavia. There are investors who purchase up to 50 parking spaces and lease them out.
''For example, an office building in Dubai Media City is charging an annual rent of Dh10,000 for parking, while in JLT it is Dh6,000 annually.
If parking space is purchased at Dh50,000, you fetch a rental income of 11 per cent, whereas if you buy an apartment, you fetch a maximum rental income of 7 per cent.
''There are already people who are investing in these units and it is anticipated to further grow as a business,'' says Batavia.
Source: Property Weekly, gulfnews.com