High premium on Port Rashid plots

Nakheel has concluded the sale of the first batch of plots to developers in Port Rashid – the only beachfront area within the city of Dubai left for development.

The plots were sold at an average of Dh750 per square foot. Land is projected to be handed over to developers by the end of this year.

Sultan Ahmed bin Sulayem, Nakheel chairman, declined to disclose the volume or value of the sales, but Emirates Business has learned that the cheapest plot in the area has been sold for Dh412 million, which comes to Dh729 per square foot for a plot of about 587,000 square foot.

Nakheel had invited developers a month ago to look at its redevelopment plans for Port Rashid.

Bin Sulayem told Emirates Business that the plots have been sold to a number of real estate development firms from the UAE and abroad, adding that Nakheel is studying the release of the next batch of plots to developers. Bin Sulayem rejected complaints from some developers that his company had exaggerated the prices of the plots to very high levels. "The fact that all the plots that were on offer sold out within weeks is an evidence that prices were realistic to the value put on the plots by developers," he said.

The average per square foot price of Dh750 was considered very high by some developers. They also complained that they were bound by contract not to sell their plots to other developers for a mark-up.

However, Nakheel clarified that the buyers can develop the plots as their own projects and sell units within their development to home and office buyers. Nakheel has given developers 18 month to settle the purchase of the land. They had to pay 10 per cent as a booking deposit. Another 10 per cent each has to be paid this month and in September. By the end of the year or at the handover of the land, whichever comes first, another 20 per cent has to be paid.

The balance 50 per cent has to be paid next year with 20 per cent in March 2009, or after three month from the handover. And 10 per cent each has to be paid in June, September and December 2009.

Bin Sulayem said Nakheel has studied a number of its own projects to be developed in Port Rashid area. He gave no details saying that these will be announced at an appropriate time.

The Nakheel chairman denied that Emaar had bought any of the Port Rashid plots on offer as these plots were too small for a master developer, adding that some of the plots on sale were bought by some of the best known names in the global real estate industry.

It is not yet known what the per square foot price of a built-up property in Port Rashid is likely to be. However, at the neighbouring Dubai Maritime City, ETA Star is selling its Verde project at Dh4,000 to Dh5,000 per square foot.

Port Rashid will be developed as a mixed-use project.

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