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The world’s attention was first drawn to Downtown Dubai in November 2008 with the opening of the Dubai Mall and then with the completion of the Burj Khalifa in January 2010. Prior to these global landmarks, the downtown area mainly comprised of Old Town Island, a lowrise luxury residential development that has since been joined by high-rise residential, commercial and hospitality projects.
The most recent among the new developments in the area is Emaar’s Act One | Act Two, which comprises high-rise residential towers and some 718 apartments. Launched last month, these towers are part of the Opera District, home to the 2,000-seat Dubai Opera that also opened last month.
“Act One | Act Two are truly a defining destination of choice for all culturally inclined as they now have the unique value proposition of living right next door to Dubai Opera,” said Ahmad Al Matrooshi, Managing Director of Emaar Properties. “The international launch of the project underlines the strong demand from discerning investors who cherish the inspired way of life that Act One | Act Two brings.” Emaar earlier launched Dubai Grand and Forte as the first residential towers in the Opera District, which will also feature luxury hotels, high-rise residences, a retail plaza, waterfront promenades and parks.
The key selling point of residences in the area remains the exclusive address, access to the Burj Khalifa and Dubai Mall. Traditionally, the area has remained an end-user market with investment yields averaging 5-6 per cent, which is lower than emerging areas in the city where investors are choosing to park their money. “Downtown Dubai is geared towards the upper end of the residential market, mainly attracting overseas owners who use homes in this area as their second residence, as well as business executives who have a companyowned flat,” says Andrew Love, Head of Investments and Commercial Agency at Cavendish Maxwell.
In June around 5 per cent of the total apartment transactions in the region were in the Burj Khalifa area, according to data from the Dubai Land Department (DLD). Nearly 50 per cent of these transactions were off-plan.
Data from real estate platform Property Monitor indicates that prices and rents in Downtown Dubai have declined only marginally between 1-2 per cent since the beginning of the year, mirroring the direction of the overall market, but maintaining the luxury price tag. For instance, sales data for August includes units in The Address Residences Dubai Opera, with transacted prices ranging from Dh2,600-Dh3,900 per square foot.
In addition to luxury residences, hospitality developments in Downtown Dubai have remained a focus for developers. While Emaar’s Address brand has multiple properties in the area, Damac also announced the opening of two new serviced hotel apartment projects in April last year: Maison The Vogue and NAIA Breeze. With a joint capacity of more than 500 suites, these projects constitute the fourth and the fifth hospitality forays for the Damac Hotels and Resorts arm. “Damac Hotels and Resorts has five projects open to date and more to come, catering for the growing need in the Dubai hospitality sector, where the number of tourists and visitors is expected to grow steadily yearon- year reaching an unprecedented level in five years’ time, during the World Expo 2020,” says Niall McLoughlin, Senior Vice-President of Damac Properties.
Among the projects launched in the first quarter by Emaar was the Address Residences Dubai Opera’s second tower comprising 375 units. It is due for completion in 2020. As per the latest financial statement released by Emaar, the Dubai Mall’s fashion expansion is scheduled for opening in the first half next year.
Even with the supply pipeline in the area, there is expected to be only a slight downward pressure on prices and rents in the short to medium term. Given the investor appetite, transaction activity will not be adversely impacted. While the effects of declining oil prices and geopolitical uncertainty have affected overall sentiment in the market, the prime residential area of Downtown Dubai is likely to remain stable in terms of sales values and rents.
The opening of the Dubai Opera is expected to further boost visitors to the Downtown area and new developments will be timed with improving market conditions. With master developer Emaar holding the majority of the land bank and residential stock in the area, the release of new projects has been in a phased manner, alongside other entertainment and leisure destinations being developed. This model is expected to continue in the coming years.
Source: Manika Dhama, Special to PW