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Wed, Nov 20, 2024 | Jumada al-Awwal 19, 1446 | DXB
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Why the rich are lining up to own property on Dubai's Palm Jebel Ali
All signs now point to Dubai’s luxury property market continuing to grow for the next 5-7 years
File photo
Long queues of property agents at the launch of villas by Nakheel at Palm Jebel Ali last week reminded us of similar queues that used to be formed during the first property boom in Dubai in the pre-global financial crisis of 2008-09. This proves that Dubai's property market has not lost its steam and the ongoing rally will go a long way.
It is not just a high return on investment or capital appreciation that is attracting the richest of the rich, but owning property on Palm Jebel Ali carries a certain prestige, too, due to its association with luxury and exclusivity and large sizes of plots. Therefore, it is a win-win game for investors and end-users in the short and long terms.
Earlier this year, the Dubai government revealed a masterplan for the Palm Jebel Ali which would add 110km of coastline and house more than 80 hotels and resorts. It would be double the size of Palm Jumeirah.
Spanning a whopping 13.4 square kilometres, the upcoming Palm will have a blend of expansive green spaces, luxury hotels, five-star restaurants and a host of other amenities and features. Also, the project will deploy the latest smart city technology to streamline transportation and adopt sustainability in line with the Dubai Urban Master Plan 2040 all of which further enhances the appeal to investors.
Going forward, private developers and investors will also jump on the bandwagon, and launch new projects in diverse sectors including hospitality and tourism. The first-ever hotel on the Palm Jebel Ali will be launched early this week.
All signs now point to Dubai’s luxury property market continuing to grow for the next 5-7 years. The luxury market has outperformed the broader Dubai real estate market, recording double-digit growth consistently. Dubai has a reputation for luxury real estate and the Palm Jebel Ali development is no exception. Owning property on Palm Jebel Ali carries a certain prestige due to its association with luxury and exclusivity. This can be an important factor for high-net-worth individuals seeking a statement piece in their real estate portfolio.
Scarcity of ultra-luxury villas
The scarcity of ultra-luxury villas for sale in Dubai underscores the irresistible allure of Palm Jebel Ali. The desire for refined, high-quality residences and unmatched lifestyles has never been more evident. This presents a golden opportunity for the resurgence of Palm Jebel Ali, especially considering the limited availability of land in Palm Jumeirah. As a result, numerous potential investors are actively seeking beachfront properties in Dubai.
Petri Mannila, head of luxury at Penthouse.ae, a luxury division of Metropolitan Premium Properties, said the response to the Palm Jebel Ali launch has been nothing short of phenomenal with the demand far exceeding expectations.
“Investors see the Palm Jebel Ali as good value, and given the continuing growth of the Dubai real estate market, they don’t want to miss out on this opportunity. Almost all high-end developments today are selling out quickly.”
Farooq Syed, CEO of Springfield Properties in Dubai, sees demand for high-end properties as robust and shows signs of further growth. “This was vividly demonstrated by the buying fervour witnessed this week as both prospective homeowners and investors queued outside Nakheel's sales centre, eager to secure a luxurious waterfront villa.”
Substantially cheaper, but higher returns
Despite being positioned as a high-end home and lifestyle destination, Palm Jebel Ali offers reasonable property prices compared to its neighbouring Palm Jumeirah. This affordability factor positions it as an attractive option for investors seeking a potentially lucrative return on investment.
Master developer Nakheel launched villas in three sizes – 5-bedroom, 6-bedroom and 7-bedroom – and 16 stunning designs to choose from.
According to Elysee Estates, the average price of a five-bedroom villa on Palm Jumeirah is around Dh48 million as compared to only Dh17.5 million on Palm Jebel Ali, cheaper by 174 per cent. On average, industry players are projecting double-digit returns in the short to medium term and triple-digit returns in the long run.
According to Farooq Syed investors eyeing opportunities in Palm Jebel Ali can look forward to the potential for substantial returns on their investments.
“As the project evolves, its inherent value is expected to appreciate, offering investors the chance to capitalise on the escalating demand for exclusive, upscale living. With its strategic location, Palm Jebel Ali is a beacon of luxury within the real estate landscape, presenting an enticing proposition for those seeking to secure a prosperous return on their investments,” said Springfield Properties' chief executive.
Prices per square foot of Dubai’s ultra-luxury properties are lower than in other international cities like New York, London, and Singapore.
“The Dh18 million or Dh2,500 per sqft launch price tag for the 5-7 bedroom villas on the Palm Jebel Ali is almost one-third or one-fourth of similar properties in Palm Jumeirah. The highest demand was for 7-bedroom units starting at Dh30 million,” said Petri Mannila.
“There is exceptional demand for prime sea/waterfront properties in Dubai with very limited supply. These properties on Palm Jebel Ali are among a handful of properties that are currently available in the market, and investors can expect prices to double from their current levels,” he added.
“We are seeing some of the properties that were launched last week being offered in the secondary market at a 25 per cent premium.”
Marketing looking forward to apartments
Once released, industry players expect that there will be a similar race to secure apartments in the most sought-after development in Dubai. Home seekers and investors will undoubtedly recognise the enormous potential of owning prime real estate in this much-in-demand waterfront location.
While it is hard to predict when the apartments will launch on the Palm Jebel Ali, there has been exceptional interest from end-users and investors for the first phase of the launch, adds Mannila.
He anticipates very strong end-user and investor interest in all types of properties on Palm Jebel Ali.
Farooq Syed echoed Mannila’s comments, saying there are no formal indications of a timeline, however, he expects an announcement will come soon on the tail of the success of the villa launch.
“We expect the apartments will attract a multitude of local, regional, and international home seekers and investors eager to buy into the elevated lifestyle and luxurious living experience that this Palm Jebel Ali promises to deliver.”
While apartment transaction prices have not risen as rapidly as villas, certain areas in the city's most sought-after locations have experienced significant price increases. The pricing strategy for Palm Jebel Ali's apartments is expected to reflect both the high desirability of the place and the overall market dynamics.
Syed said specific launch prices will be influenced by factors such as size, view, amenities, and the unique features of each apartment. However, the developers are likely to adopt a competitive pricing strategy to attract potential buyers while ensuring that the value of this iconic destination is well-represented in the market.
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Waheed Abbas
Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
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