Property prices on The Palm Jumeirah are among the most expensive in Dubai and are set to continue to rise as developments on the man-made island come online.
Developer Nakheel boasts that prices of homes on The Palm have rocketed by 500 per cent since they went on sale in 2002. However, some experts say the island remains a solid investment, but such a high return is not expected to continue. In 2002, 1,500 villas and 2,500 apartments were all sold within 72 hours of going on sale. Then, a 7,000 sq ft villa could be purchased for Dh4.6 million. On today’s market, it would fetch between Dh20m and Dh35m.
Chris O’Donnell, chief executive of Nakheel, said in the next three to four years more milestones would be reached on The Palm Jumeirah to perpetuate the attractiveness of the island. “The Palm Jumeirah has proved to have been an unparalleled investment.
Some properties have achieved premiums of more than 500 per cent and there is no doubt that these will remain a sound investment for the foreseeable future.”
Approximately 20 per cent of the original homes sold six years ago have been resold, some up to five times. The remaining 80 per cent are in the hands of the original buyers.
Nakheel says currently 1,500 families live in the 20 shoreline apartment buildings and frond villas with their own private beaches.
A one-bedroom shoreline apartment, originally costing Dh600,000, is now valued at Dh3m and higher. According to real estate agent Better Homes, this year a two-bedroom shoreline apartment on The Palm Jumeirah will cost Dh1,611 per sq ft. In comparison, a two-bedroom apartment in Burj Dubai costs Dh5,163 per sq ft, Old Town Dh2,621 per sq ft and Business Bay Dh1,877 per sq ft. In autumn last year, Nakheel sold 500 units for the first time on the Marina Residences – at the tip of The Palm’s trunk – for Dh2,500 per sq ft. The remaining 500 units will go on sale in the next few months.
Walter Hart, an independent property consultant, said the big money on The Palm had been made during the early years of Dubai’s property boom, between 2003 and 2005, and he now believed investors are looking at new mega projects that will yield bigger returns.
“If you look, not just in Dubai but in Abu Dhabi, Ras Al Khaimah and in the Middle East in general, there are a lot of massive developments under way. If I was a big investor sitting in, say Germany, I would be looking at something new. I agree that as construction on The Palm is completed, the appeal to live there does rise, but I think we will see more sustained growth now.”
IFA Hotels and Resorts has $2 billion worth of construction under way on The Palm, including its Kingdom of Sheba on The Palm’s crescent, and a 50-50 stake in the Palm Golden Mile – a high-rise residential, retail and office boulevard at the head of the trunk.
The company believes the fact that people are now living on the development makes a big difference in prices. IFA Hotels and Resorts vice-president for asset management Patrick Smith said: “Is The Palm Jumeirah a good investment? Absolutely. In 2003, we were selling at Dh650 to Dh700 per sq ft. In 2004, we launched The Golden Mile and prices were Dh1,000 per sq ft. Today, in the Kingdom of Sheba, prices are Dh3,500 to Dh4,000 per sq ft.”
The Island in Figures
The Palm Jumeirah is one of the world’s largest man-made islands, covering 560 hectares of land.
It can comfortably accommodate more than 600 football pitches.
It is more than one-and-a-half times the size of Central Park in New York and four times the size of Hyde Park in London. A total of 94 million cubic metres of sand and seven million tonnes of rock have been used in building the island. The amount of material used could create a wall two metres high and half a metre wide that would circle the globe three times.
Trump Hotel and Tower
This Dh2.2 billion development will be the first joint venture between Nakheel and the Trump Organisation. It will be a 48-storey hotel and residential building linked to a 300-room five-star hotel. It is expected to be one of the last developments to be completed in 2012.
There are 20 shoreline apartment buildings on The Palm, which offer a view of the sea and access to a private beach. There is also 24-hour security, beach club, gym and laundry service. These are the only freehold apartments in Dubai where you can walk out on to the beach.
The Golden Mile
The development offers 200 retail outlets and 860
residential units comprising townhouses, one-, two- and three-bedroom apartments and penthouses. It will also have a park.
The Dh1.4 billion, 5.5km monorail will have four stations – Gateway, Trump Towers, the Village Centre and Atlantis. The monorail will initially carry 2,400 passengers per hour in each direction in four separate trains, each made up of three cars. At full capacity, the figure will rise to 6,000 people in nine vehicles.˜
The Atlantis is a Dh1.2 billion project and will be The Palm’s flagship hotel, located at the tip of the crescent. It is a joint venture between Nakheel Hotels and Kurzon International. The Atlantis will have 1,550 rooms and the UAE’s largest water theme park. It is expected to be completed in November 2009.
These are located on the branches of The Palm. Occupancy began in 2006 and they will eventually house 8,000 people. Plot owners have been able to design their own villas.
Ground work began on the six towers, located at the tip of The Palm Jumeirah’s trunk, in September 2006. Once complete, they will boast 940 two- and three-bedroom apartments, penthouses and 40 townhouses.
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