Showing posts with label rental. Show all posts
Showing posts with label rental. Show all posts

Predicting the Dubai property market

16 November, 2007
Here's an interesting excerpt from an article by Ryan Mahoney of The Gulf News, published today.

If I had a dirham for every time I was asked what is going to happen to property prices in this market I would have built up a tidy sum by now! The truth of the matter is that nobody has the definitive answer, we can debate for hours on end and come up with a likely scenario, but without a crystal ball it's tricky. It is possible however, to look to other similar markets and consider the natural cycle of real estate for guidance so for what its worth, here are my thoughts on one of the most frequently asked questions in Dubai.

There are many factors that affect the price of property but the biggest single factor that has influenced the Dubai market over recent times has been supply and demand. At a time when the majority of units are still under construction, we have seen an incredible level of demand for all types of properties; from apartments to villas and warehouses to office towers.

When the freehold property law was introduced, the Dubai property boom was born. Attractive launch prices along with unique and aspirational projects such as The Palm Jumeirah and The World made Dubai an investor's paradise. Speculators looked for quick returns by capitalising on an untapped market, expatriates bought somewhere to live and holidaymakers looked to these shores for a second home.

Ever since, demand has continued to increase, pushing prices up with it, providing investors with fantastic returns, both in terms of capital growth and leasing revenue. Such increases have spurred more people to buy here, creating further demand and driving prices up.

The massive influx of people, driven by Dubai's positioning as a major business hub for the region and a luxury holiday destination, has created an insatiable demand for property. All new residents need a place to stay and in the same way, multinationals need business premises. The pace of growth means there hasn't been enough property to go around and therefore, any completed property available for sale or lease has been at a premium rate.

The second biggest factor affecting the supply shortfall, and therefore prices, is delivery delays. In many cases, construction has taken far longer than was ever expected, adding further pressure to an already strained market.

So getting back to where I started; what does the future hold? Dubai is currently a hive of construction activity and as each development reaches completion, more products become available. However, as these projects are delivered, there will, of course, be more and more people relocating to Dubai for work, the number of which will affect how long it takes for supply to even out. The nature of real estate suggests that at this point we could see a levelling of prices.

Ultimately though, I don't see anything drastic happening to prices. Dubai still has a lot to offer buyers. With increased regulations adding further credibility to the market, and the current strength of some foreign currencies making Dubai property more affordable, as well as some exciting new projects underway, demand should remain a firm favourite with buyers for some time to come.

Commercial property growth forecast strong

In its latest study on the Dubai property market, Egypt's largest investment bank observed that while prices for freehold commercial space have risen, selling prices remain at the bottom end among business cities, coming in at an average of about $400 per square foot, resulting in rental yields of around 20 per cent, compared to a global average of 6-7 per cent.

The study noted that over the short term, with demand for commercial property outpacing supply, rents will continue to rise. This has sustained the trend of rental increases.

Market analysis estimate commercial occupancy rates of around 99 per cent in both traditional and newer areas of Dubai. "According to our estimates, office rents have risen by almost 40 per cent year-to-date (YTD) in both old and new areas of Dubai as demand continues to outweigh supply," it said.

The bank's analysis shows that office and commercial rents in Old Dubai (Garhoud, Bur Dubai and parts of Sheikh Zayed Road) have risen by 36 per cent on average (YTD) and in new Dubai (Shaikh Zayed Road, DIFC, Business Bay, Jumeirah Lake Towers, Internet and Media City) by almost 45 per cent (YTD).
"The more luxurious Grade A properties in both areas jumped by around 35 per cent on average. Finding office space in the city remains arduous, with companies settling for less desirable locations, renting temporary space in villas, setting up branches or smaller offices or buying rather than leasing office space. Newer areas of Dubai have become centres of commerce, a trend that explains why rental rate increases are not easing in these locations."

It observed that selling prices for off-plan developments in the DIFC, Burj Dubai and offices in the JLT have increased by approximately 17 per cent over the past eight months due to the desirability of their locations and on expectations of strong yields based on current off-plan prices and expected future rents.

Dubai becomes property investment hotspot

Real estate experts are predicting that the next popular overseas market is set to be Dubai. Property companys in the region believe that the ongoing development of the region's tourist industry could lead to a very successful buy-to-let market and strong rental yields, reports Easier.com.

Dubai has seen a vast increase in investment from both the government and overseas developers in recent years and the country is keen to develop its tourist industry. At the moment, the annual visitor figure stands at around five million but this is set to grow as new attractions tempt additional holiday makers.

"Purchasing a unit in one of the luxury new residences can net you up to 18 per cent rental yields per year"
explained one senior Dubai property consultant.

He added:
"With up to 51 per cent tax free growth and an expected 15 million tourists by 2010, the buy to let market is a very attractive prospect for property owners."

OFFICE PROPERTIES

WATER'S EDGE
Water's Edge is a spectacular 20-storey waterfront tower offering the ultimate convenience for anyone seeking to work and enjoy their leisure time in one strategic location. Offering vistas of sparkling water, buzzing and vibrant surroundings, activities, events and wide-open spaces, this tower gives a whole new definition to a work environment. Employees, clients and business associates can enjoy the diversity that comes with working and rejuvenating both side by side.

Type: Office
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 1355 - 2100 sqft.
Prices: ~ 2,500,000 - 3,900,000 (AED), 360,000 - 560,000 (GBP)

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THE CORNER
The Corner at Business Bay is a spectacular 19-storey office tower, ideally located for those who enjoy being in the midst of all the action. Working here is intended for people who seek to be associated with a vibrant community of like-minded individuals. From an incredible architectural style to the breathtaking views outside, The Corner at Business Bay provides a fitting ambience for multinationals seeking to establish base in this region.

Type: Office
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 920 - 1600sqft.
Prices: ~ 1,600,000 - 2,800,000 (AED), 230,000 - 400,000 (GBP)

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PARK CENTRAL
Park Central is a spectacular 17-storey office tower, right in the heart of Business Bay. An ideal location for those who enjoy being in the midst of all the action. With offices designed to give you fantastic lake views from three sides of the tower.

Type: Office
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 900 - 1600 sqft.
Prices: ~ 1,600,000 - 2,800,000 (AED), 230,000 - 400,000 (GBP)

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EXECUTIVE BAY
Designed to the highest standards and offering a previously unimagined office environment, Executive Bay is a 19-storey marvel. Situated on a prime waterfront location in Business Bay, it offers dramatic views of the region's new business hub. From an incredible architectural style to the breathtaking views outside, working here is intended for people that seek to be associated with a vibrant community of like-minded individuals.

Type: Office
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 950 - 1250 sqft.
Prices: ~ 1,600,000 - 2,200,000 (AED), 230,000 - 315,000 (GBP)

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XL TOWER
An excellent environment and infrastructure for businesses from around the world to set up their local, regional and international headquarters located next to Downtown Dubai.
A master development of all developments, Business Bay is the new emerging freehold business, commercial and residential district. Next to Downtown Dubai (Burj Dubai), along Sheikh Zayed Road, extending up to a new creek and all the way to Dubai's coast.
XL Towers is a modern elegance designed for commercial use. Where professionals can enjoy their own space, in every sense of the world. Airy lobby, Spacious elevators, Expansively planned workstations etc. A project with a place for everything and everything in its place.

Type: Office
Location: Business Bay, Dubai
Completion: Oct-08
Accommodation: 1000 - 1500 sqft.
Prices: ~ 2,100,000 - 3,100,000 (AED), 300,000 - 440,000 (GBP)

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BUSINESS TOWER
A symbol of dynamism and growth, the Business Tower at Business Bay is a signature commercial building which stands out among the others. An innovative office design with leading edge sustainability, the form of the tower is in direct response to the path of the sun as it moves around the building thus encouraging maximum natural light into the office. Contributing to the perfect balance of light is an exterior layer of translucent screen and solar shading, which keeps away harsh glares and ensure soft filtered light into the office.

Stay ahead of competition. Work better. Meet deadlines earlier. Make smooth transactions a daily routine. And to this end, Business Tower offers varied infrastructure which makes all this easily possible.

Type: Office
Location: Business Bay, Dubai
Completion: Dec-08
Accommodation: 1200 - 1300 sqft.
Prices: ~ 2,500,000 - 2,800,000 (AED), 360,000 - 400,000 (GBP)

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PARK TOWERS
Inspired by the evolution of Dubai and the undulating soft forms of the desert, the Park Towers is an incredible twin landmark, designed by the finest architects in the world. Its duality is expressed by two vertical solid fins, which represent the rigid urban form reaching into the sky, from which the curved expressive soft form of the tower façade is suspended. .
Minutes away from the hip and happening parts of the city, Park Towers offers a panoramic view of Dubai and the new financial centre and is poised to be the most sought after address in Dubai's International Financial Centre.

Type: Office
Location:
Completion: TBC
Accommodation: 2100 - 2800 sqft.
Prices: ~ 6,500,000 - 8,300,000 (AED), 930,000 - 1,200,000 (GBP)

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Please note: We do our best to ensure that price guides are accurate, but prices can change. Therefore prices shown are for guidance only. Equivalents shown in £ (GBP) are calculated using an approximated exchange rate, and are also for guidance only. Exchange rates are always subject to fluctuation. We will be happy to confirm prices on request.

RETAIL PROPERTIES

EMIRATES GARDENS
A stunning sequel to a sensational investment and beautiful living. Emirates Gardens 2. High on quality yet low on investment. The beautiful development is a delightful combination of 3 buildings. Maple, Magnolia and Mulberry - each ground plus 4-storeys. A warm, friendly, peaceful, secure neighbourhood with great retail opportunity. Located in Jumeirah Village South near Dubai Media City, Dubai Internet City and the Jebel Ali Free zones.

Type: Retail space
Location: Jumeirah Village (South), Dubai
Completion: Sep-08
Accommodation: 500 - 780 sqft.
Prices: ~ 1,000,000 - 1,600,000 (AED), 140,000 - 230,000 (GBP)

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THE PIAZZA - Retail
A unique and extraordinary design that embraces different color schemes and material-mix to create a distinct landmark. Located in Fox Hills - Lusail, The Piazza is a high-class residential and retail complex. A beautiful charming ambience conceptualized to catch the eye from far. A stunning sight to behold from close. Creating the charisma of a picture-perfect lifestyle.

Type: Retail space
Location: Qatar-Lusial, Foxhill, Doha
Completion: TBC
Accommodation: 1100 - 1600 sqft
Prices: ~ 2,200,000 - 3,100,000 (AED), 310,000 - 440,000 (GBP)

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SMART HEIGHTS
In today's era of blue-chip professionalism, jet-set deadlines and rising overheads, there is simply nothing better than Smart Office Space to ensure high returns on per employee investment. And you can be rest assured of dramatic results in work efficiency, in almost every area of your business activities.
Little wonder then the corporate world is moving their offices and their staff to Smart Office Space. Damac Properties has been at the forefront of introducing path-breaking Smart Technology in residential projects and now in office space.
Freehold smart office space in a freezone is a smart investment. Owning an office in the heart of Technology & Media Freezone(TECOM), Dubai also gives your business the competitive edge, reduces your overheads and increases productivity.
A hub of a vibrant business community Smart Heights gives you the full range of business opportunities to entrepreneurs as well as regional, national and international companies.

Type: Retail space
Location: TECOM, Dubai
Completion: Nov-08
Accommodation: 1800 - 2300 sqft. (retail). 6500 sqft. (restaurant). 24 floors
Prices: ~ 4,500,000 - 5,800,000 (AED) (retail) and~ 19,600,000 (AED) (restaurant), 640,000 - 830,000 (retail) and 2,800,000 (restaurant) (GBP)

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PARK TOWER
Located in the heart of the region's financial hub, this shopping paradise is designed to become the most sought after destination of high Net-worth customers from in and outside Dubai. And also the business class who work and live here.
The two-tower masterpiece is inspired by the evolution of Dubai and the undulating forms of the desert. Residents can enjoy an ultra modern luxurious lifestyle with panoramic views of the designer city.
Unwind anywhere and anytime, with world-class recreational facilities, whether you'd like to wander into a distant dream, attend to your mind's needs or simply experience a little peace and tranquility; Park Towers is the place to be.

Type: Office
Location: Financial centre
Completion: TBC
Accommodation: 2400 - 5800 sqft.
Prices: ~ 6,600,000 - 23,000,000 (AED), 940,000 - 3,300,000 (GBP)

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CAPITAL BAY

Type: Retail space
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 1100 - 2200 sqft.
Prices: ~ 1,900,000 - 3,700,000 (AED), 270,000 - 530,000 (GBP)

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Please note: We do our best to ensure that price guides are accurate, but prices can change. Therefore prices shown are for guidance only. Equivalents shown in £ (GBP) are calculated using an approximated exchange rate, and are also for guidance only. Exchange rates are always subject to fluctuation. We will be happy to confirm prices on request.

BENEFITS OF DUBAI PROPERTIY INVESTMENTS

There are many benefits of investing in residential or commercial property in Dubai. Dubai is perhaps the most vibrant developing city in the world, a fact recognised by private and institutional investors, as well as the corporate world.

Eight out of the world's largest companies now have major offices in the city, and nearly 400 of the Fortune 500 companies are represented there too.

The Emirates is rich with the proceeds of oil production which has formed the backbone of the economy for many years, but the government has the foresight to know that this will not always be the case and is investing heavily in diversifying its own economy. Indeed it has set targets concerning its GDP (gross domestic produce), and stated that by 2010 only 10% of its GDP will be from the oil industry. Such has been its committment that this target was smashed four years early, in 2006. Growth in Dubai's leisure, tourism and commercial sectors has been so swift that oil represented only 3% of the GDP in 2006.

Some other facts and figures about Dubai:
- 0% income tax, 0% capital gains tax
- 0% corporate tax
- No foreign exchange controls
- No trade barriers or quotas
- Stable, freely convertible currency pegged to the dollar

Some facts and figures about the developers we represent:
- $20bn conglomerate with a diversified range of businesses (including property development)
- Employs over 8000 people across operations in 20 countries
- Its property development business is the Middle East's largest private master developer, and one of UAE's largest private businesses
- 4200 million sq ft of luxury and 9500 customers, across developments in 6 countries
- 16 offices, 68 projects

Some investment and return figures:
Lake Terrace (2003 - now) - 63% annual appreciation, 190% total appreciation
Lake View (2004 - now) - 56% annual appreciation, 111% total appreciation
Lago Vista (2005 - now) - 34.5% annual appreciation
Marina Terrace, launched in 2003, investors have made 228% total appreciation plus 23% rental yields
Waves, launched in 2002, investors have returned 213% appreciation and 19% rental yields

The pros of Residential v's Commercial:
Residential - strong capital growth, good rental yields, taper relief 40% after 10 years
Commercial - stronger capital growth, better rental yields, taper relief 75% after 2 years