A real estate investment company in Dubai has sold off all its units off-plan at its four-star hotel in Jumeirah Village Circle.
SKAI Holdings reported sales worth Dh927 million for its Dh1.2 billion Suites in the SKAI. It has 234 hotel rooms, 234 one- and two-bedroom serviced apartments, and 33 penthouses in the 60-storey tower.
Construction on the project will start in September and is expected to be ready in 2017. The one-bedroom apartments start at Dh2.03 million, while the two-bedroom ones are going for Dh3.46 million. The four-bedroom penthouses start at Dh7.67 million.
The rate of growth in sales prices of residential units have slowed in Dubai to six per cent in the second quarter, down from 10 per cent in the first, according to consultancy JLL.
But continued demand from investors meant that contracts worth US$ 5.4 billion have been awarded in the first six months.
“Certain developments located near hospitality demand generators may have interest from off-plan purchasers, because they offer a different investment risk and return,” said Gaurav Shivpuri, the head of capital markets for the Middle East and North Africa region at JLL.
Unlike the pre-crisis years, the investors are also better protected this time.
Dubai’s Real Estate Regulatory Agency requires developers to have paid fully for the land and have 20 per cent of construction costs in an escrow account before off-plan sales begin. It also does not allow developers to take profits out of the project that limits the risk of development default if the off-plan sales do not occur at the anticipated speed, Mr Shivpuri said.
At the end of June, the current supply of residential units in Dubai were 372,000 units. The second half of the year has a pipeline of 15,000 units while 17,000 units are in line for next year.
SKAI Holdings, which launched the project in June, would own the five food and beverage outlets, meeting rooms, spa and 17,000 square feet retail space in the development.
Aimed at travelers, the units at the project will feature over half a million square feet of indoor vegetation to maintain the temperatures, green balcony gardens, and 271 swimming pools.
The main contractor for the project is China State Construction Engineering, while Atkins is the lead consultant and architect. Tokyo-based Nao Taniyama and Associates will design the interiors and Australia’s Topo Design Studio will do the landscaping.
“SKAI Holdings sees a great deal of potential for upscale four-star concepts, which is one of the hospitality industry’s most resilient sectors,” said Kabir Mulchandani, the group chief executive of Skai Holdings, in a statement.
Its 117 one-bedroom hotel apartments will come with an outdoor sky garden while the 117 two-bedroom apartments will include an 18-square-foot swimming pool and floor-to-ceiling windows with cascading water.
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