Traffic, sewage stench no block to soaring Discovery Gardens rents

Sewage water stench and tariff snarls haven't slowed down the pace of rental increases in Discovery Gardens, a community comprising over 20,000 housing units, with rents increasing at a much quicker pace than in upscale communities such as Dubai Marina, Downtown Dubai and even Palm Jumeirah.

Online listings now put rents at Dh48,000 to Dh50,000 per annum for studio apartments and Dh65,000 to Dh70,000 pa for one-bed apartments.

In fact, Asteco Property Management report put the rents rise in the once affordable development at 44 per cent in 2013. And if that’s not enough, landlords have now started asking for annual rent be paid in one cheque.

Ahmed Ali, who shifted from one building to another in Discovery Gardens, did pay Dh65,000 rent in one cheque.

“The agent quoted me Dh65,000 for one cheque and Dh70,000 for four cheques. I took an advance from my company and used some of my savings to pay the rent in one cheque.”

Besides, Ali paid 5 per cent (Dh3,250) commission to the real estate agent and 5 per cent (Dh3,250) refundable security deposit to the landlord.

Asked why he moved out from his old apartment, he said: “My landlord was not communicating with us. We tried several times to reach him. His agent told us that he [landlord] wanted to sell the apartment.

“He was also a service charge defaulter. Though we had paid the rent, we had no access cards. Every time we had to wait for someone to open the door to enter the building… it was really a pathetic situation for us.”

Nakheel is not issuing access cards to landlords who are service charge defaulters in Discovery Gardens.

Why so high demand?

“Discovery Gardens is a very popular development of apartments close to Ibn Battuta Mall and, therefore, handy for any travellers that need to commute to Abu Dhabi,” says Mario Volpi, Managing Director, Prestige Real Estate.

They have a good mixture of individuals and are also sought after by the educational sector as many teachers reside there. A lot of companies have rented out entire buildings for their staff accommodation as well. There is good public transport system with business connecting to Ibn Battuta Metro station every three to five minutes.

New exit planned

Emirates 24|7 reported in August that Roads & Transportation Authority (RTA) was working on a new exit to Sheikh Mohammed Bin Zayed Road (formerly Emirates Road) from Discovery Gardens and Gardens.

Asteco has said that 2014 will see a continuation of the trend witnessed in the previous year with sales prices and rents increasing, albeit at a slower pace as approximately 25,000 residential units are expected to delivered this year.

Jones Lang LaSalle, a global real estate consultancy, also has said that rents will increase but a slower pace than 2013.

Discovery Gardens consists of six themed communities inspired by garden living, and includes Zen, Mediterranean, Contemporary, Mogul, Mesoamerican and Cactus courtyard gardens. The development spans over 26 million square foot plot and has 291 buildings.

Know your right

In order to control the arbitrary rent increases, the Dubai government released a new rent decree in December 2013. The Decree, No. 43 of 2013 now sets a specific band on how the maximum rental increases that a landlord can demand at the time of renewing leases.

The decree is applicable to private and public sector owned properties in Dubai, as well as within the free zones.

Rent slabs

*No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area

*If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value

*If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value

*If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value

*If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit, the maximum rent increase applicable is of 20 per cent

The average similar rental value of the property will be determined by the Real Estate Regulatory Agency's rent index, the decree states.

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