Property investors take the long view

Developers at Cityscape in Dubai insist the emirate's property market is not forming a bubble.

Real estate investors are now looking at long-term growth, unlike in the previous boom years, said developers at Cityscape Global.

Units at Skai Holdings’ Viceroy Dubai Palm Jumeirah hotel project sold out a month ago, and about 10 per cent of the units are back for resale, said Kabir Mulchandani, the chief executive of Skai Holdings. The project has 481 hotel rooms and 221 hotel residences.

“Most of the buyers are holding the units and they are not looking for short-term gain,” he said. “That is better [for developers] as it creates speculative demand and was part of what led to the crisis.”

The buyers have to pay 20 per cent of the total value upfront at the Skai project and the rest on completion. The project is expected to come online by December 2016.

Abuali Malik Shroff, the chairman and managing director of Sheffield Holdings and owner and developer of the Dream Dubai Marina, said he is seeing a similar trend. About 30 per cent of its 420 serviced apartments were sold off-plan. The project started in 2008, then stalled in the credit crunch.

“Most of the investors now are non-residents and they are now set for long-term growth,” Mr Shroff said. The project is to comprise hotel apartments besides a hotel, and is to be ready for handover by the last quarter of next year.

About a quarter of the buyers are from the UAE, with the rest from India, Saudi Arabia and the United Kingdom.

RAK Properties is encountering more end-users and domestic buyers as against those pre-2008, said Rashed Sultan Al Khatri, director of marketing and sales at RAK Properties.

“Around 40 per cent of the buyers are UAE nationals and around a quarter are from the Indian subcontinent,” Mr Al Khatri said.