Desert Gold
Dubai Real Estate
by Stephen Saunders
In the last year the price of villas appreciated a
staggering 70%. Residential condos values were
not far behind at over 40% and the demand for
office space is still strong at 37%. Donald Trump
launched his latest residential project posting a
record sellout within days at over $3,250. psf. Brad
Pitt is designing a new eco-friendly boutique hotel
and there is talk that Robert Dinero may be
launching a new restaurant. The residents and
companies here represent a veritable ‘who’s who’
in a long list of global players and it’s all happening
in – DUBAI.
Dubai – UAE
Dubai, located in the United Arab Emirates is a
strategic base for several hundred Fortune 500
companies and is a regional hub for banking,
finance, insurance, shipping, manufacturing and
tourism. Ideally placed at the crossroads between
the East & West, it’s only a 3-6 hour flight from
most locations in Europe, Africa and Asia. It’s the
most liberal and transparent of the Gulf States and
above all, safe and secure. Everything about Dubai
is simply – MASSIVE and 1st class.
It’s best known for the Burj AL Arab Hotel, the tallest
free-standing 7 star hotel in the world and by 2010
the worlds largest airport will be completed that will
handle 60 million passengers per year. What will be
the tallest tower in the world is under construction
and currently stands at 636m and will feature the
1st Armani hotel. (the final height of the tower is
still to be announced!) MGM Universal studios has
planned a theme park along with 6 Flags. Dubailand
will feature various other theme parks including a
built to scale replica of the Eiffel Tower and
Pyramids of Giza.
For business, one of Dubai’s major attractions is
its tax free status – 100% foreign ownership of
freehold real estate, 100% foreign ownership of
corporations, 100% freedom from personal or
corporate income taxes, 100% repatriation of
capital and an effortless & transparent visa issuance
procedures. Dubai is open for business and
businesses from all over the world are coming.
It’s no surprise that the demand for real estate –
residential & commercial, exceeds the supply. The
only thing industry experts seem to disagree on is
‘when’ the supply will meet the demand. Some
estimate 2012 others feel it more like 2015 but at
the continued rates of growth and increase in
tourism, it will be years before we may see the
market leveling off. Considering that allowing
foreign ownership of property was officially
instituted in 2006, the real estate market is still in
its infancy when you compare the prices against
markets like NYC, London, Singapore, Hong
Kong, Mumbai & Shanghai – Dubai real estate is
a bargain.
Dubai
Residential
Q4 2006
Q4 2007
Growth
Q2 2008
Growth
Average
Rental m² pa
319
343
8%
420
22%
Average
Sales m²
3,371
3,960
17%
5,420
37%
Yield
9.50%
8.70%
7.70%
Dubai
Offices
Q4 2006
Average
Rental m² pa
573
Average
Sales ft²
7,346
Yield
7.80%
Q4 2007
Growth
692
21%
9,227
26%
7.50%
Q2 2008
Growth
950
37%
11,730
27%
8.10%
Report by Colliers Int’l featured in Gulf News July 2008
Dubai – Infrastructure
One of the most important considerations for any
investors in foreign real estate is infrastructure.
Desert Gold Contd…
