Dubai: Palm Jebel Ali sparks long-term investor interest – News

Palm Jebel Ali is gaining increasing interest from long-term investors, standing out as the top performing area in Dubai in terms of sales in the fourth quarter of last year.

Industry executives say investors are selling their units at premiums of up to 10 percent to cash in on profits following the three-year rebound in the local real estate market. Following the success of Palm Jumeirah, Palm Jebel Ali is considered one of the next big destinations sought after by millionaires and billionaires in Dubai.

Master developer Nakheel Properties began launching villas in the upcoming Palm Jebel Ali in September last year, following the relaunch of the project by the Dubai government. Subsequently, the main developer launched more villas, which attracted very strong demand from local and foreign investors.

Some people are considering it as a future residence, but for most, it is a potential capital appreciation given the growth of Dubai. There is much hope for investors.

With areas like Palm Jumeirah aging, investors see newer communities as this, the next big move in that direction.

In terms of geographical performance, Mayed Al Rashdi, research analyst at Emirates NBD Research, said Palm Jebel Ali stood out as the best performing area in terms of sales value in the fourth quarter of 2023, generating 14.2 billion of dirhams. Dubai Marina followed in second place with Dh8.3 billion, while Business Bay came in third with Dh5.1 billion.

“In the premium villa sales segment, Jumeirah and Palm Islands outperformed their peers in 2023 with prices increasing by 33 percent year-on-year and 36 percent year-on-year in December, respectively,” Al Rashdi said. in a note.

Farooq Syed, CEO of brokerage firm Springfield Properties, said flagship developments like Palm Jebel Ali are instrumental in catalysing the dynamics of Dubai’s off-plan market as they are recalibrating market expectations for the luxury villa segment. establishing new pricing paradigms that will become the reference point. for luxury and strategic urban planning.

Farooq Syed

“Palm Jebel Ali is at the forefront of this change and represents a combination of luxury, innovation and sustainability meticulously designed to meet the standards of today’s global investors. With Dubai’s real estate sector recording sales of Dh35 billion in January 2024 and off-plan sales seeing 25% year-on-year growth to approximately Dh15 billion from Dh12.2 billion in January 2023, it is clear that developments as Palm Jebel Ali is shaping the future of luxury living. This trend is not only transforming the Jebel Ali district, but is also a testament to Dubai’s position as one of the leading destinations for high-end investments,” said Syed.

Mostly investors

Liam Chase, senior property consultant at Allsopp & Allsopp Group, said the response to Palm Jebel Ali has been positive from buyers and investors. “We have seen the launch of six sheets and around 95 per cent of the properties have been sold, which shows great promise for the area… With the increasing demand seen during the launch of the first sheet, two sheets have been launched more to meet market demand. Although there has not been any significant change in prices,” Chase said.

Liam Chase

“In terms of buyer preferences, we have seen a large influx of long-term investors looking for future investment prospects, looking for beachfront living where they can walk right out onto their private beach. That’s their long-term vision: to create a community similar to what exists on Palm Jumeirah, but with a much newer, more modern feel,” Chase said, adding that most of the buyers we’ve seen are investors.

Sold with up to 15% premium

The senior consultant at Allsopp & Allsopp Group said many investors in the market sell at premiums of between 5 and 10 percent. However, resales have proven to be a challenge due to existing stock with the developer that has not yet been sold.

“Once this developer stock decreases, sellers will have a better chance of achieving the premiums they want. Additionally, potential buyers may be awaiting new releases, anticipating possible price increases. If we see prices increase with these new releases, reselling at a premium price may become more feasible,” he said.

As the area gains traction with more launches, Chase sees more consistent growth. “For now, we can expect average performance similar to other areas in Dubai, unless the developer introduces unexpected launches to the market,” Chase said.

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