The latest lavish homes on Dubai's Palm Jumeirah are being handed over to residents following the completion of the Kempinski Hotel Residences, adding to a surplus of high-end apartments in the emirate. Emerald Palace, a leading Dubai-based Ukrainian property developer, will complete the handover of residential property at the development by the end of next month. But the opening of the adjoining Emerald Palace Kempinski, a 250-room hotel, will be delayed by almost two years.
More than 240 residential units were sold as part of the US$500 million (Dh1.83 billion) project at the peak of Dubai's property boom between 2007 and 2008, when a beach-front villa on Nakheel's Palm Jumeirah could fetch about Dh16m. While many other developers of off-plan projects have struggled to collect payments from buyers, James Wilson, the managing director of Emerald Palace Group and a former chief executive of Nakheel, said there had been "zero" defaults among customers, whose homes were now valued at between Dh3,500 and Dh5,000 per square foot.
This was partly due to the Kempinski Rental Programme, in which investors who intend to use their properties for only a few weeks a year can rent them through Kempinski for the rest of the year while taking 75 per cent of the profit. Mr Wilson said about 90 per cent of buyers had opted for the rental scheme. "That's our success, it's all end-users," he said. "The only type of speculation, and that's the wrong word to use, is that they get a return on investment."
Meanwhile, the Emerald Palace Kempinski, in which Emerald Palace has invested $70m and was due to open late last year, will now open at the end of next year. The delay was mainly due to the arrival of competition from other hotels on Palm Jumeirah, such as the Atlantis, which opened in November 2008 with an extravagant fireworks display and party that is estimated to have cost $20m, just as the financial crisis gripped Dubai's property sector.
"We thought it was wise to watch the effect the entry of a large-format hotel such as Atlantis had on the Palm and how it would progress in terms of operation, staffing, training, resource management and, most importantly, demand, before we went ahead with our development and opening schedules," Ulrich Eckhardt, the president of Kempinski Hotels Middle East and Africa, told The National in December.
Mr Wilson said the hotel's structure was ready and that fit-out work would begin once the residences had been handed over. Meanwhile, work on Emerald Palace's two other ventures in Dubai with the Kempinski hotel chain, one on the Palm Jebel Ali and the other at Business Bay, has been delayed until market conditions improve. "We've purchased the land but are fully focused on Palm Jumeirah at the moment," said Mr Wilson.
"When the timing's right and the markets worldwide have recovered, we'll start development of our projects at Palm Jebel Ali and Business Bay." The companies have also linked up for the Kempinski Plaza, which is under construction in downtown Kiev, the Ukrainian capital. Emerald Palace, which also has a construction subsidiary, has built 10,000 homes in Ukraine and Russia and has plans for further expansion in the UAE.
"We've had many approaches by people who've bought land in Dubai and Abu Dhabi who want to maybe partner with us, so we're looking at lots of things at the moment but very carefully, we want to be prudent with our cash," Mr Wilson said. @Email:firstname.lastname@example.org